Net Income:
A)Decreases equity.
B)Represents the amount of assets stockholders put into a business.
C)Equals assets minus liabilities.
D)Is the excess of revenues over expenses.
E)Represents stockholders' claims against assets.

Question

Quizplus · Accepted Answer

Net income is the excess of revenues over expenses. It is the amount of profit earned by a business during a specific period of time. It increases equity, as it is retained earnings that are added to the company's reserves, which in turn increases the shareholders' claims against the assets.