BUSINESS ADMINISTRATION
FINANCIAL ACCOUNTING
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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Revenue-Gross profit
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Revenues-Expenses
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Revenues-Expenses-Dividends
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Revenues-Expenses + Dividends
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Detailed explanation-1: -Net income (NI) is calculated as revenues minus expenses, interest, and taxes. Earnings per share are calculated using NI. Investors should review the numbers used to calculate NI because expenses can be hidden in accounting methods, or revenues can be inflated.
Detailed explanation-2: -What is it? Revenue is defined as the income generated through a business’ primary operations. It is often referred to as “top line” and is shown at the top of an income statement. Net Income is an accounting term that refers to the total revenue minus the total expenses for any given period.
Detailed explanation-3: -Net Income = Total Revenue-Total Expenses.
Detailed explanation-4: -Net income is calculated by taking revenues and subtracting the costs of doing business, such as depreciation, interest, taxes, and other expenses. The bottom line, or net income, describes how efficient a company is with its spending and managing its operating costs.
Detailed explanation-5: -Revenue – Cost of Goods Sold – Expenses = Net Income The first part of the formula, revenue minus cost of goods sold, is also the formula for gross income.