Net income or net loss for a period is calculated by the following formula:
A) total liabilities - total revenue.
B) total revenues + total expenses - total withdrawals - assets.
C) total revenues - total expenses.
D) total revenues - total expenses + capital.

Question

Quizplus · Accepted Answer

Net income or net loss is calculated by subtracting total expenses from total revenues. This formula reflects the basic principle of income determination in accounting, where the net result (profit or loss) is determined by the difference between what has been earned and what has been spent during a period.

Net Income or Net Loss for a Period Is Calculated