BNN Ltd expects to operate at a profit in its next fiscal year. Which statement 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 profit
C) Net profit is expected to be greater than operating income
D) Actual gross profit less operating expenses will equal expected net profit

Question

Quizplus · Accepted Answer

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

BNN Ltd Expects to Operate at a Profit in Its