Net Income Is

question 60

Multiple Choice

Net income is:

• A) added to beginning retained earnings on the retained earnings statement
• B) deducted from beginning retained earnings on the retained earnings statement
• C) added to assets on the balance sheet
• D) deducted from net sales on the income statement

---

Definitions:

Accrued Interest

Interest that has accumulated over a period but has not yet been paid or received.

Note Payable

A financial obligation represented by a written promise to pay a specified amount of money, plus interest, by a certain date or on demand.

Interest Expense

The cost incurred by an entity for borrowed funds, considered a non-operating expense on the income statement.

Commercial Bank

A financial institution that offers a broad range of deposit accounts, including business loans, retail banking, and other financial services.