Which of the following formulas is correct?
A) Revenues - Gross Profit - Non-Operating Expenses = Net Income
B) Gross Profit - Non-Operating Expenses - Income Tax Expense = Net Income
C) Revenues - Cost of Goods Sold - Non-Operating Expenses - Income Tax Expense = Net Income
D) Revenues - Cost of Goods Sold - Other Operating Expenses - Non-Operating Expenses - Income Tax Expense = Net Income
E) Revenues - Unearned Revenues - Cost of Goods Sold - Non-Operating Expenses - Income Tax Expense = Net Income

Question

Quizplus · Accepted Answer

The correct formula for calculating Net Income is: Revenues - Cost of Goods Sold - Other Operating Expenses - Non-Operating Expenses - Income Tax Expense = Net Income. This formula accurately reflects the process of subtracting all relevant expenses from revenues to arrive at net income.

Which of the Following Formulas Is Correct