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Arises from income statement activities that constitute the entity's on going major or central operations----------------

User Tom Sabel
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Final answer:

The question asks about a concept related to the income statement in the field of business, specifically regarding ongoing major operations. The answer explains that this concept refers to operating income or profit, and provides an example calculation to determine if a center should continue in business.

Step-by-step explanation:

The subject of this question is Business.



The grade of this question is College.



The statement is referring to the concept of operating income or operating profit. This is the income that arises from an entity's ongoing major or central operations. It represents the revenue generated from the core business activities minus the variable costs associated with those activities.



In the given example, the revenue earned by the center is $20,000, and the variable costs are $15,000. To determine if the center should continue in business, we need to calculate the operating income. Operating income can be calculated by subtracting the variable costs from the revenues: $20,000 - $15,000 = $5,000.



Since the operating income is positive ($5,000), it indicates that the center is earning a profit from its ongoing operations. Therefore, the center should continue in business.

User WombaT
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