Asked by Frank Renteria on Jun 28, 2024
Verified
Which of the following transactions will result in an increase in operating income as of the date of the transaction?
A) The sale of investments at a gain.
B) Collection of cash from a customer for services to be provided at a later date.
C) Providing a service to a customer on account.
D) The receipt of cash dividends from an investment.
Operating Income
Earnings before interest and taxes (EBIT), calculated as gross profit minus all operating expenses, including depreciation and amortization.
Investments
Financial assets purchased with the aim of generating income or appreciation in value over time.
Providing Service
Providing service involves performing tasks or work for customers, often in exchange for payment, as part of a business's operations.
- Ascertain the qualities of expenses and revenues and how they affect operating income and net income.
- Calculate net income and operating income based on given financial information.
Verified Answer
Learning Objectives
- Ascertain the qualities of expenses and revenues and how they affect operating income and net income.
- Calculate net income and operating income based on given financial information.
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