Residual income generates a dollar amount which represents the increase in value to the company beyond the cost necessary to pay for the financing of assets.

Question

Quizplus · Accepted Answer

This is correct. Residual income is the amount of income that a company has after accounting for expenses, but also considers the cost of financing assets. It is a measure of the profitability of a company beyond just the basic accounting of revenues and expenses.

Residual Income Generates a Dollar Amount Which Represents the Increase