ECONOMIC INCOME Definition

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ECONOMIC INCOME is the maximum amount that can be distributed to owners during the accounting period and leave the business as well off at the end of the accounting period as it was at the beginning of the period; i.e. cash flow based.

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RELEVANT RANGE is the range of activity over which changes in cost are of interest to management

LIMIT TEST is a computer program step that compares data with predetermined limits as a reasonableness test, e.g. number of hours worked over 40 per week.

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