Which of the following best defines a corporation's earnings?
A)They are the amount of revenue the corporation receives for the sale of its products, minus its costs of production, as measured by its accountants, minus the dividends paid out.
B)They are the amount of revenue the corporation receives for the sale of its products, minus its direct and indirect costs of production, as measured by its economists, minus the dividends paid out.
C)They are the amount of revenue the corporation receives for the sale of its products, minus its costs of production, as measured by its accountants.
D)They are the amount of revenue it receives for the sale of its products, minus its direct and indirect costs of production, as measured by its economists.

Question

Quizplus · Accepted Answer

A corporation's earnings refer to the amount of revenue it receives for the sale of its products, minus its costs of production, as measured by its accountants. This definition excludes any dividends paid out to shareholders, which are considered separate from earnings. Option A includes dividends paid out, which is incorrect. Option B considers economists to measure costs, which is not the norm in accounting. Option D includes economists but not accountants, which is also not accurate.

Which of the Following Best Defines a Corporation's Earnings