Residual income is defined as:
A) Difference between expected comprehensive income and required earnings by the firm
B) Difference between comprehensive income and retained earnings
C) Difference between comprehensive income and the companies book value.
D) The addition of comprehensive income to net income for the year.

Question

Quizplus · Accepted Answer

Residual income is the difference between the actual comprehensive income and the required earnings by the firm, representing the income generated above the minimum required return.

Residual Income Is Defined As