Which of the Following Accounts Is Not Included in the Calculation

question 268

Multiple Choice

Which of the following accounts is not included in the calculation of net income?

• A) Rent expense.
• B) Cash.
• C) Rent revenue.
• D) Services revenue.
• E) Wages expense.

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Definitions:

Novation

Novation is the act of replacing one obligation with another by mutual agreement, effectively transferring the rights and duties to a new party.

Valid Obligation

A duty or commitment that is legally binding and enforceable by law.

Capital Investment

Funds spent by a company to acquire or upgrade physical assets, such as property, industrial buildings, or equipment, to improve its business capacity or efficiency.

Partnership Creditors

Individuals or entities to whom a partnership owes money or has some form of legal financial obligation.