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Answered 2008-05-07 10:33:40

Net Income is revenue minus expenses. Assets minus liabilities is Net Worth.

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Does interest payable go on an income statement?

No, the income statement includes revenues and expenses; assets and liabilities(such as accruals) go on the balance sheet.

What are the 5 elements of accounting?

Assets, Liabilities, Expenses, Income & Equity.

Is income statement an asset?

Answer:No. Assets are resources, shown on the balance sheet. Assets are funded by equity and liabilities (obligations). The purposes of a company is to manage these assets (and liabilities) so that the assets increase in value relative to the liabilities. For example, generating csh by selling washing machines for a higher price than cost, while paying the bills.Increases in assets increase net income, decreases reduce it. For liabilities it is the reverse: increases in liabilities reduce net income, and decreases increase it (doesn't happen often).The income statement shows the revenues and expenses over the period.

Does the income statement show total assets?

The income statement shows the total movement of expenses and revenues from that year.The balance sheet shows the total movement of assets, liabilities and equity from that year.It is the BALANCE SHEET that shows the total assets, not the income statement - which shoes profit/loss etc etc..

What is an expanded basic accounting equation?

The expanded accounting equation replaces Owner's Equityin the basic accounting equation (Assets = Liabilities + Owner's Equity) with the following components: Owner's Capital + Revenues - Expenses - Owner's Draws. In other words, the expanded accounting equation for a sole proprietorship is: Assets = Liabilities + Owner's Capital + Revenues - Expenses - Owner's Draws.In the expanded accounting equation for a corporation, Stockholders' Equity in the basic accounting equation (Assets = Liabilities + Stockholders' Equity) is replaced by these components: Paid-in Capital + Revenues - Expenses - Dividends - Treasury Stock. The resulting expanded accounting equation for a corporation is: Assets = Liabilities + Paid-in Capital + Revenues - Expenses - Dividends - Treasury Stock.The expanded accounting equation allows you to see separately (1) the impact on equity from net income (increased by revenues, decreased by expenses), and (2) the effect of transactions with owners (draws, dividends, sale or purchase of ownership interest).

Why might the revenue and cost figures shown on a standard income statement not be representative of the actual cash inflows and outflows that occurred during a period?

The Income Statement deals only with revenues and expenses. The Cash Flow Statement includes any form of cash flow, be it revenues, expenses, the sale or purchase of assets, payment or proceeds from liabilities, etc etc.. Hence the income statement does not provide a complete picture of the entity's cash activities. Does this make sense? If it doesn't, drop me a line :) Happy study!

Are revenues the same as net income?

Revenues are earnings from sales of products and net income is the difference between revenues and expenses.

What is bookkeeping formula?


If you have net sales total assets total liabilities and owners equity how do you figure out the net income?

Net income = Net sales - Expenses. So, we need to figure out what the expenses were for the period you are interested in. Now, expenses for a period is a temporary account under Equity just like revenue (net sales). Net sales increase equity while expenses decrease equity. So, net income for a period will be the change in equity during that period. Assets - Liabilities - Owners Equity = Net Income The accounting equation: Assets = Liabilities + Equity can be rewritten to be Assets - Liabilities = Equity In this equation, Equity refers to Total Equity which is Owners Equity plus Net Income. You don't need the net sales figure for this question

What is on an income statement?

revenues and expenses

What are operating liabilities?

Short-term liabilities resulting from the primary business operations of a firm. They are non-interest bearing and comprise of accounts payable, accrued expenses, and income tax payable. Operating liabilities are deducted from total assets to determine the net operating assets.

Can you find expenses on an income statement?

yes! that's actually where you find the income and expense accounts of the business.. while in the balance sheet, you find the assets, liabilities and capital..

How do i figure net income if given assets liabilities and owner's equity?

Assets - Liabilities - Owner's Equity = Net Income This is an adjustment to the Accounting Equation of Assets = Liabilities + Equity. In the case of this equation, Equity refers to Total Equity which is Owner's Equity + Net Income.

What is calculated by adding back noncash expenses to net income and adjusting for changes in current assets and liabilities?

net cash from opertional activity

What is the format of a balance sheet?

The format of the Balance Sheet is Assets = Liabilities + Equity * Current Assets * Fixed Assets * -------------------- * Total Assets * Current Liabilities * Long Term Liabilities * -------------------------- * Total Liabilities * Equity * Net Income * ---------------------------- * Total Equity * -------------------------- * Total Liabilities and Equity

How do you calculate net income from assets and liBILITIES?

assets - liabilities = owners equity.

What are the two sides of budget?

revenues (income) and expenses

What are the categories in an income statement?

+ Incomes or Revenues - Expenses

By matching revenues and expenses in the same period in which they incur?

By matching revenues and expenses in the same period in which they incur, net income or loss will be properly reported on the income statement.

How do you figure total equity if given assets liabilities and net income?

It's pretty easy. The basic financial equation is: Assets = Equity + Liabilities. A part of equity is retained earnings. Retained earnings = net income - dividends Equity = Assets - Liabilities

How are revenues and expenses reported on the income statement under the accrual basis of accounting?

Revenues are reported on the income statement in the period in which they are earned.

Do you include land in the income statement?

Land is a fixed asset for business and all assets and liabilities arrives in balance sheet of business while income and expenses are shown in income statement so land is not part of income statement.

Does debit always mean an increase?

Incase of expenses and assets accounts debit means increase while for income and liabilities accounts debit means decrease.

Net income will result during a time period when?

revenues exceed expenses.

What is difference between a trial balance and a balance sheet?

Traditionally, in the double entry accounting system, a trial balance is a simple summary of all the accounts of a business including income, expenses, assets, liabilities, and equity. A balance sheet, on the other hand, is a formally organized summary of assets, liabilities, and equity only. (Or what it's got and what it owes.) And to complete the picture then, an income statement is a formally organized summary of income and expenses. (Or what it earned and what it spent.)