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a. Gross Income determines the company's cash flow, Net Income does not b. Gross Income includes several fixed costs, Net Income does not c. Gross Income includes all fixed costs, Net Income does not include any d. Gross Income measures profitability before operating expenses, whereas Net Income is calculated after all operating expenses
the answer is option D. Gross Income/profit measures profitability before operating expenses, whereas Net Income/profit is calculated after all operating expenses,gross income does not include administrative,non cash deductions like depreciation,and other financial expenses.
the last choice D
Gross Income measures profitability before operating expenses, whereas Net Income is calculated after all operating expenses
Gross income comes after deductin of all direct expenses and net income can be calculated after deducting indirect expenses from gross income.
In my opinion its Option No :D
d........................................
The concepts of gross and net income have different meanings, depending on whether a business or a wage earner is being discussed. For a company, gross income equates to gross margin, which is sales minus the cost of goods sold. Thus, gross income is the amount that a business earns from the sale of goods or services, before selling, administrative, tax, and other expenses have been deducted. For a company, net income is the residual amount of earnings after all expenses have been deducted from sales. In short, gross income is an intermediate earnings figure before all expenses are included, and net income is the final amount of profit or loss after all expenses are included. For example, a business has sales of $1,000,000, cost of goods sold of $600,000, and selling expenses of $250,000. Its gross income is $400,000 and its net income is $150,000. The main flaw in the use of gross and net income for a business is that the gross income figure is more likely to be closely related to the results of operations, while net income can include a variety of non-operational expenses, gains, and/or losses. Thus, the two calculations are based on different sets of information, and are used in different types of analysis. For a wage earner, gross income is the amount of salary or wages paid to the individual by an employer, before any deductions are taken. For a wage earner, net income is the residual amount of earnings after all deductions have been taken from gross pay, such as payroll taxes, garnishments, and retirement plan contributions. For example, a person earns wages of $1,000, and $300 in deductions are taken from his paycheck. His gross income is $1,000 and his net income is $700
Gross income includes all of the income your business earns during the year.
Net income includes only the profit your business earns after you subtract business expenses and other allowable deductions from your gross income.
If your net income is positive, then your business may have reportable capital gains. If your net income is negative, your business may have a deductible capital loss.