Question

What is the term for the total amount of money brought in by a practice minus all expenses incurred and taxes paid?

1) accounts receivable
2) gross revenue
3) profits
4) net income
5) cash flow
6) petty cash

Answer 1

The term for the total amount of money brought in by a practice minus all expenses incurred and taxes paid is 'net income'. It is a more comprehensive measure compared to accounting profit as it includes taxes and is a clear indicator of a business's financial health.

The term for the total amount of money brought in by a practice minus all expenses incurred and taxes paid is net income. This figure is derived after deducting business expenses and taxes from the total revenue, which is income generated from selling products or services (Total Revenue = Price x Quantity). While accounting profit considers only explicit costs, net income accounts for both explicit costs and taxes, providing a clearer picture of the financial health of a business. In the context of the options provided, net income is the closest answer to the definition given.

Answer 2

The term for the total amount of money brought in by a practice minus all expenses incurred and taxes paid is net income. Net income is calculated by subtracting all expenses from the gross revenue.

Step-by-step explanation:

The term for the total amount of money brought in by a practice minus all expenses incurred and taxes paid is net income. Net income is calculated by subtracting all expenses from the gross revenue. It represents the profit or loss of a business after accounting for all costs.

For example, if a practice has a gross revenue of $100,000 and incurs $30,000 in expenses and $10,000 in taxes, the net income would be $60,000 ($100,000 - $30,000 - $10,000).