Net Income:
A) Decreases equity.
B) Represents the amount of assets owners put into a business.
C) Equals assets minus liabilities.
D) Is the excess of revenues over expenses.
E) Represents owners' claims against assets.

Question

Quizplus · Accepted Answer

Net income is the excess of revenues over expenses, also known as profit. This amount increases equity as it is added to retained earnings. Therefore, options A, B, C, and E are incorrect.