Net Income Is

question 134

Multiple Choice

Net income is:

• A)The excess of debits over credits.
• B)The increase in owners' equity resulting from the profitable operations of the business.
• C)The excess of liabilities over assets.
• D)The increase in assets of a company during a year.

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Definitions:

Standard Amount

A predetermined benchmark for expenses, revenues, or units produced, used for budgeting and measuring performance.

Actual Output

The quantity of finished goods or services produced by a company over a specific period.

Labor Rate Variance

The difference between the actual cost of labor and the budgeted cost of labor, based on the standard rate and actual hours worked.

Variable Overhead Rate Variance

The difference between the actual variable overhead costs incurred and the expected costs based on the standard variable overhead rate.