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How does Gross Income differ from Net Income?

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   

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Question added by حسين محمد ياسين , Finance Manager , مؤسسة عبد الماجد محمد العمر للمقاولات العامة
Date Posted: 2016/01/24
FITAH MOHAMED
by FITAH MOHAMED , Financial Manager , FUEL AND ENERGY CO for transportion petroleum materials

Gross profit: in general is a gross profit from trading operations (buying and selling) without general and administrative expenses and depreciation deduction

Gross profit = total value  of revenues- direct cost's revenues

The net profit = gross profit - Administrative and other financial expenses

 

Hemachand Chaiyanur Mohanraj
by Hemachand Chaiyanur Mohanraj , Accounts And Admin Executive , Saudi Masterbaker Ltd

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.  

هيثم ناجى
by هيثم ناجى , محاسب اول , الفيوم لصناعة السكر

the last choice D 

Gross Income measures profitability before operating expenses, whereas Net Income is calculated after all operating expenses   

 

Asim Rabbani
by Asim Rabbani , Assistant Manager Finance , Tamimi Global Co.Ltd

Gross income comes after deductin of all direct expenses and net income can be calculated after deducting indirect expenses from gross income.

manseer muhammed ali
by manseer muhammed ali , Accountant General , Royal Lighting L.L.C & Royal Furnishing LLC

In my opinion its Option No :D

abdelaziz allam
by abdelaziz allam , محاسب اول , شركة كامبردج مصر للاستثمار التعليمي ش.م.م

d........................................

Shabbir Hussain
by Shabbir Hussain , General Accountant , Fiscal

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

Deleted user
by Deleted user

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.

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