Net Income = Sales - Expenses
So as many expanses net income will be lower.
If inventory is understated, net income is also understated because cost of goods sold will be overstated
EXpense
net income
Total operating income less total operating expense = net operating income (or loss if the expenses were higher)
It reduces the net income because it is an expense. Expenses are deducted from income when computing the net income. It has no effect on cash flow because when the asset depreciates, there's no money involved. The only thing involved in depreciation is the carrying value of the asset.
Yes this is right statement as if some expenses are forgot to record it overstated the net income and reduces the expenses but in actual there is less net income then shown in income statement.
result in a overstated net income
net Accounts Receivable will be overstated.
Yes all expenses reduces the net income so does rent expense also reduce the net income of company.
If inventory is understated, net income is also understated because cost of goods sold will be overstated
The total depreciation for an accounting period is recorded as a depreciation expense on the income statement. This reduces net income, which is also known as the bottom line. Net income equals revenues minus expenses. Higher depreciation expense contributes to higher total expenses, which results in lower net income. Companies with mostly older assets that have been fully depreciated and companies with few long-lived assets benefit from low depreciation expense and higher net income.
Depreciation Expense reduces net income and has no effect on cash flow.
EXpense
net income
Maintence Expense is just like any other expense and will be reported on the income statement and deducted from Gross Income to obtain Net Income...
Included in net income are the following: 1. All revenue-related accounts, e.g. Sales, service revenue, interest income, rental income, etc. 2. All expense-related accounts, e.g. Purchases, Depreciation, Rental expense, Maintenance expense, Amortization, Utilities expenses, etc. Net income = Revenues - Expenses
Net Income