Question

When preparing a monthly budget, describe how net income is calculated.
a.
Net income is calculated by taking the expenses subtotal and subtracting the income subtotal.
b.
Net income is calculated by taking the income subtotal and subtracting the expenses subtotal.
c.
Subtracting the expenses subtotal from the net income will give you the income subtotal.
d.
Adding the expenses subtotal to the net income will give you the income subtotal.

Answer 1

b.

Net income = income subtotal − expenses subtotal. (If expenses exceed income, net income is negative—i.e., a deficit.)