Which calculation yields net income given revenues and expenses?

Which calculation yields net income given revenues and expenses?

• A. 80,000
• B. 50,000
• C. 0
• D. 20,000

Answer: (D)

Net income is found by subtracting expenses from revenues. When revenues exceed expenses, the result is a positive net income. In this scenario, the numbers given produce a net income of 20,000, meaning revenues exceed expenses by 20,000 (for example, 120,000 in revenues minus 100,000 in expenses equals 20,000). The value 0 would indicate break-even (revenues equal expenses), while larger numbers would require different revenue and expense amounts than those provided.

Net income is found by subtracting expenses from revenues. When revenues exceed expenses, the result is a positive net income. In this scenario, the numbers given produce a net income of 20,000, meaning revenues exceed expenses by 20,000 (for example, 120,000 in revenues minus 100,000 in expenses equals 20,000). The value 0 would indicate break-even (revenues equal expenses), while larger numbers would require different revenue and expense amounts than those provided.