How is net income calculated in an income statement?
A) Net income = Net operating income + Interest
B) Net income = Gross profit - Retained earnings
C) Net income = Net sales - Variable operating costs
D) Net income = Earnings before taxes - Taxes
E) Net income = Net cash flow + Depreciation

Question

Quizplus · Accepted Answer

Net income is calculated by subtracting taxes from earnings before taxes (EBT). This is shown in the formula: Net income = EBT - Taxes.

How Is Net Income Calculated in an Income Statement