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When preparing the income statement, which of the following is subtracted from r

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Question: When preparing the income statement, which of the following is subtracted from revenue?

Options:

  1. Assets
  2. Liabilities
  3. Expenses
  4. Equity

Correct Answer: Expenses

Solution: 

Expenses are subtracted from revenue to determine the net profit or loss.

When preparing the income statement, which of the following is subtracted from r

Practice Questions

Q1
When preparing the income statement, which of the following is subtracted from revenue?
  1. Assets
  2. Liabilities
  3. Expenses
  4. Equity

Questions & Step-by-Step Solutions

When preparing the income statement, which of the following is subtracted from revenue?
  • Step 1: Understand that an income statement shows how much money a business makes (revenue).
  • Step 2: Know that expenses are the costs the business has to pay to operate.
  • Step 3: Realize that to find out how much money the business actually keeps, you need to subtract expenses from revenue.
  • Step 4: The result after subtracting expenses from revenue is called net profit or loss.
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