An increase in a company's revenue and expense accounts will automatically cause an increase in net income for the period.

Question

Quizplus · Accepted Answer

An increase in revenue without a corresponding increase in expenses will result in an increase in net income. However, an increase in expenses without a corresponding increase in revenue will result in a decrease in net income. Therefore, it is not always true that an increase in both revenue and expenses will lead to an increase in net income. It depends on the magnitude of the changes in each account.

An Increase in a Company's Revenue and Expense Accounts Will