Question 16 1 The basic formula for the income statement is O net worth equals assets minus liabilitie1Question 16 1 The basic formula for the income statement is O net worth equals assets minus liabilities. total revenue minus total expenses equals net income. O operating revenue minus operating e...
Question 16 1 The basic formula for the income statement is O net worth equals
assets minus liabilities. total revenue minus total expenses equals net income. O
operating revenue minus operating expense equals operating income. O assets
plus liabilities equals net income.
Answer & Explanation
The correct answer is: total revenue minus total expenses equals net income.
Explanation:
An income statement, also known as a profit and loss statement, is a financial
document that summarizes the revenues, costs, and expenses incurred during a
specific period of time. The basic formula for an income statement is:
Total Revenue - Total Expenses = Net Income
Here's the breakdown of why this option is correct:
1. Total Revenue: This includes all the money earned by the business from
its operations before any expenses are deducted.
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