Net Income

question 239

Multiple Choice

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.

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Definitions:

Capital

Refers to financial assets or their financial value, as well as the tangible factors of production that are used to create other goods and services.

After-Tax Cost

The actual cost of an expense or investment after taking into account the effects of taxes.

Debt

An amount of money borrowed by one party from another, under the condition that it is to be paid back at a later date, usually with interest.

Tax Rate

The share of profits or income that individuals or companies must pay to the government as taxes.