Which term describes the result after subtracting all expenses and taxes from total revenue?

Which term describes the result after subtracting all expenses and taxes from total revenue?

• A. Net Profit
• B. Net Worth
• C. Opportunity Cost
• D. Net Income/Loss

Answer: (D)

When you subtract all expenses and taxes from total revenue, you’re looking at what the business actually earned after costs. This amount is called net income. If that result is positive, it’s profit; if it’s negative, it’s a loss. Since the question describes the outcome in general, the most precise label is Net Income/Loss, because it clearly encompasses both profit and loss scenarios. Net Profit is basically the same idea but is typically used only for positive results. Net Worth isn’t about the income statement—it’s assets minus liabilities on the balance sheet. Opportunity Cost is the value of the next-best alternative foregone.

When you subtract all expenses and taxes from total revenue, you’re looking at what the business actually earned after costs. This amount is called net income. If that result is positive, it’s profit; if it’s negative, it’s a loss. Since the question describes the outcome in general, the most precise label is Net Income/Loss, because it clearly encompasses both profit and loss scenarios. Net Profit is basically the same idea but is typically used only for positive results. Net Worth isn’t about the income statement—it’s assets minus liabilities on the balance sheet. Opportunity Cost is the value of the next-best alternative foregone.