Question

Andy is preparing the company's income statement. His first line item is the company's service revenue. What will he deduct from this line item to obtain the net income?
Andy needs to subtract _______ from the service revenue.

Fill in the blank

Answer 1

Andy needs to subtract cost from the service revenue.

What does Andy need to subtract?

Revenue is the total income earned before any deductions are made. Net income is the total revenue less total expenses or cost.

Net income = total revenue - cost

For example, if a company sold 100 loaves of bread for $100 dollars. The cost of making the bread is $50. The revenue is $100 and the net income is $50 (100 - 50).

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