Question

Which of these components does a business exclude from its net income under “operating surplus”?

a.)money it will pay as dividends to shareholders
b.)money it will keep aside as retained profits
c.)money it will pay as direct taxes
d.)money paid as salaries or wages to employees

Answer 1

As regularly the enterprise's own funds are excluded from operating surplus and payment of domestic staff employed is considered to generate no surplus then the correct option is d

Answer 2

The answer is: d.)money paid as salaries or wages to employees

Net income represent the amount of monetary value that obtained by a business after excluding all the expense that it made during the operation.

Salaries or wages to the employee are a part of this operational expense. As the salaries paid to the employees go higher, the amount of net income that the business has for future operation would be reduced.