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

Question

Quizplus · Accepted Answer

Net income is the amount by which revenues exceed expenses, which means it represents the profit or earnings of the business. It's a key measure of financial performance and is used to calculate taxes, dividends, and other payments. It does not affect equity directly, but it can increase it indirectly if the company decides to reinvest or distribute the profits to shareholders.