Which of the following describes the aftermath of subtracting total costs from total revenue?

Which of the following describes the aftermath of subtracting total costs from total revenue?

• A. Loss
• B. Net Income
• C. Capital Gain
• D. Equity Contribution

Answer: (B)

The aftermath of subtracting total costs from total revenue is best described as net income. This figure represents the profit that a business earns during a specific period after accounting for all expenses incurred in generating that revenue. When total revenue exceeds total costs, the result is positive net income, indicating that the business is profitable. Net income is a critical indicator of a company's financial health, as it provides insight into how effectively a business can turn revenue into profit. It is essential for assessing the overall performance of a business and is used by stakeholders to evaluate operational efficiency, make investment decisions, and establish future financial strategies. In summary, the process of subtracting total costs from total revenue gives insight into the profitability of a business, and when revenues surpass costs, the resulting figure is termed net income.

The aftermath of subtracting total costs from total revenue is best described as net income. This figure represents the profit that a business earns during a specific period after accounting for all expenses incurred in generating that revenue. When total revenue exceeds total costs, the result is positive net income, indicating that the business is profitable.

Net income is a critical indicator of a company's financial health, as it provides insight into how effectively a business can turn revenue into profit. It is essential for assessing the overall performance of a business and is used by stakeholders to evaluate operational efficiency, make investment decisions, and establish future financial strategies.

In summary, the process of subtracting total costs from total revenue gives insight into the profitability of a business, and when revenues surpass costs, the resulting figure is termed net income.