The excess of divisional income from operations over a minimum acceptable amount of divisional income from operations is
A) profit margin
B) residual income
C) rate of return on investment
D) gross profit

Question

Quizplus · Accepted Answer

This is the definition of residual income, which is the excess of divisional income from operations over a minimum acceptable amount of divisional income from operations. Profit margin is the ratio of net income to sales, rate of return on investment is the ratio of net income to investment, and gross profit is the difference between sales and cost of goods sold.

The Excess of Divisional Income from Operations Over a Minimum