Net income (definition)
Share this article:
Post on twitter:
The net income of a company is the difference between the revenue created by a company during its operations in a set time period minus the expenses needed to run those operations. The net income appears on the income statement as the bottom line (the same“bottom line” from which the familiar expression derives).
Net income = revenue– expenses
References
Pratt, Jamie. (2003).Financial Accounting in an Economic Context.New York: John Wiley& Son.
Related Articles and Workbooks
Deferred sale: Financial events series, part 16 of 29 This example shows how a deferred sale is recorded in the journal entry and on the financial statements.
Working capital (definition) Working capital is what remains on the balance sheet after current liabilities are subtracted from current assets.
Fiscal period assumption The fiscal period assumption entails that accounting take place over periodic and set time frames of equal duration.
Purchase of fixed assets—partially on credit: Financial events series, part 7 of 29 This example shows how the purchase of fixed assets partially on credit is recorded on the financial statements.
Aggregate purchases of goods for resale: Financial events series, part 23 of 29 This example shows how aggregate purchases of goods for resale are recorded on the financial statements.
Cash vs. accrual accounting Two principal accounting methods exist to record business transactions: cash accounting and accrual accounting.
Related Videos
