Operating Income Is Calculated as Net Sales Minus

question 116

Multiple Choice

Operating income is calculated as net sales minus.

• A)Utilities expense.
• B)Salaries expense.
• C)Cost of goods sold.
• D)All of the other answers are subtracted from net sales to calculate operating income.

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Definitions:

Depreciation

The method by which a company allocates an asset's cost over its useful life, reflecting the consumption of the asset's economic benefits.

Disposable Income

The reserve of funds households possess for spending and saving after income tax payments.

Savings

The portion of disposable income not spent on consumption of goods and services, set aside for future use.

Disposable Income

Net financial resources for households to allocate towards spending and savings after income taxation.