Question

Spell all words correctly.

Catherine sat down with all of her income details from the past year to calculate the total income she had in that period. After she created a consolidated income statement, she deducted some tax-exempt income details from the statement. What term would Catherine use for this final income calculation? The final income that Catherine has calculated is called the
a) Net income
b) Gross income
c) Taxable income
d) Adjusted gross income

Answer 1

The term that Catherine would use for the final income calculation is 'Adjusted gross income'

Step-by-step explanation:

The term that Catherine would use for the final income calculation after deducting some tax-exempt income details from the consolidated income statement is Adjusted gross income (option d)

Adjusted gross income (AGI) is an individual's total income after deducting eligible expenses such as business expenses, contributions to retirement accounts, and tax-exempt income. It is calculated by subtracting deductions and exemptions from the individual's gross income. AGI is an important figure used to determine taxable income and eligibility for certain tax credits.