Types of Financial Statements – Net Income

Practice Question

Intro to Financial Accounting
Financial Statements and Business Decisions
Types of Financial Statements
MCQs

A company has total sales of $400,000 and total expenses of $300,000. What is the net income?

  1. $100,000
  2. $700,000
  3. $300,000
  4. $400,000
Answer +
Correct Answer: A
Explanation +

Step 1: Identify key variables.
Total Sales (TS) = $400,000
Total Expenses (TE) = $300,000

Step 2: Use the Net Income formula.
Net Income (NI) = TS – TE

Step 3: Calculate.
NI = $400,000 – $300,000 = $100,000

Thus, the net income is $100,000.