Which of the following is true of net income?
A) Net income is operating income divided by income tax rate.
B) Net income is operating income plus operating revenues minus operating costs minus income taxes.
C) Net income is operating income plus nonoperating revenues minus nonoperating costs minus income taxes.
D) Net income is operating income minus nonoperating revenues minus nonoperating costs minus sales taxes.

Question

Quizplus · Accepted Answer

Net income is the income earned by a business during a specific period after deducting all expenses, including operating expenses, nonoperating expenses, and income taxes. Option C correctly depicts this formula by adding nonoperating revenues, subtracting nonoperating costs, and then deducting income taxes from the result to arrive at net income.

Which of the Following Is True of Net Income