Explain the 3-2-1 Rule

question 8

Essay

Explain the 3-2-1 Rule.

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Definitions:

Net Income

The amount of earnings left over after all expenses, including taxes and interest, have been deducted from total revenues.

Net Loss

The amount by which a company's expenses exceed its revenues during a specific accounting period, indicating a negative financial performance.

Investment

The process of distributing funds with the goal of earning additional income or profits.

Withdrawal

Money taken out from a business by its owner for personal use, decreasing the owner’s equity in the business.