In accrual accounting, net income is defined as
A) Revenues − Expenses + Gains + Losses
B) Revenues − Expenses
C) Revenues − Expenses + Gains − Losses
D) increase in net assets from nonowner transactions

Question

Quizplus · Accepted Answer

Net income in accrual accounting is calculated as Revenues minus Expenses plus Gains minus Losses. This formula accounts for all forms of income and expenses, including those not directly related to the primary operations of the business (gains and losses).

In Accrual Accounting, Net Income Is Defined as