BNN Corporation expects to operate at a profit in its next fiscal year. Which of the following statements about its budgeted income statement is true?
A) Operating expenses are expected to be greater than gross profit.
B) Operating income is expected to be greater than net income.
C) Net income is expected to be greater than operating income.
D) Gross profit minus operating expenses will equal net income.

Question

Quizplus · Accepted Answer

Operating income is calculated before interest and taxes, while net income is calculated after these deductions. Therefore, operating income is typically greater than net income.

BNN Corporation Expects to Operate at a Profit in Its