Question

What is the difference between gross revenues and net revenues? Hint: think about discounts and charity care.

a) Gross revenues are total revenues before any deductions, while net revenues are after deductions like discounts and charity care.
b) Gross revenues are revenues for-profit organizations, while net revenues are for non-profit organizations.
c) Gross revenues include non-operating income, while net revenues do not.
d) There is no difference between gross and net revenues.

Answer 1

Gross revenues are total revenues before any deductions, while net revenues are after deductions like discounts and charity care.

Step-by-step explanation:

The difference between gross revenues and net revenues lies in the deductions that are taken into account. Gross revenues refer to the total revenues before any deductions, such as discounts and charity care, are subtracted. On the other hand, net revenues are the revenues that remain after these deductions are made. For example, if a company generates $100,000 in gross revenues and had $20,000 in discounts and charity care, the net revenues would be $80,000.