Net income is the profit resulted from the operation of the entity after deducting the operating expenses and the administrative expenses. applicable taxes are also being deducted to come up with "the net income". The residual of assets after liabilities had been taken away is the stakeholder's equity. Net income will become part of the Stakeholder's Equity at the end of the accounting period and will be added to Retained Earnings, beginning to form Retained Earnings, ending.
return on capital employed (ROCE) is net income/(debt&equity) whereas return on equity is income/equity (without debt).
expenses decrease owner's equity where as revenue increases owner's equity
Profit is earnings, a smaller amount the price of create the earnings. And Equity is property defect liabilities. This is the worth of what the owner in fact owns. Income increase equity. Extra investment also increases equity.
the difference between income and consumption
If there is a joint venture between two companies. Each of the companies, under the equity method, only records half of the income from the joint venture on the income statement-nothing on balance sheet. With the proportionate consolidation method, the parent companies record half of the liabilities and assets from the joint venture.
Yes reserve is part of equity as it is created from net income and net income is part of equity as well.
there is no difference.
a
Revenue is the gross inflow of economic benefits during the period arising in the course of ordinary activities of an entity when those inflows result in increases in equity, other than increases relating to contributions from equity participants. Income is the increase of economic benefits during the accounting period in the form of inflows or enhancements of assets or decreases of liabilities that result in increases in equity, other than those relating to contributions from equity participants.
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Current income = ending equity - opening equity current income = 1.98 - 1.38 Current income = 0.6 million
The income tax act focuses its concern on total income and the income tax rule focuses on which types of income are taxable. That is the biggest difference between the two.