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

Question

Quizplus · Accepted Answer

Net income or net loss is calculated by subtracting all expenses from all revenues. Option C states the correct formula, which is total revenues - total expenses. Options A and D are incorrect as they include withdrawals or capital, which are not relevant to calculating net income or net loss. Option B includes withdrawals, which are not necessary for calculating net income or net loss.

Net Income or Net Loss for a Period Is Calculated