Asked by Frank Renteria on Jun 28, 2024

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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.
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ZK
Zybrea KnightJul 03, 2024
Final Answer :
C
Explanation :
Providing a service to a customer on account increases operating income because it generates revenue from the company's core business activities, even though cash has not yet been received.