Business income refers to which of the following?

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Multiple Choice

Business income refers to which of the following?

Explanation:
Income is money the business earns that increases its net worth. When you sell goods or provide services, revenue adds to assets and increases the owner’s equity, raising the net worth. Expenses, taxes, and other costs reduce net worth, so they are not income. Loans change the balance of assets and liabilities but don’t boost net worth, since they create a liability rather than an additional net asset. So the description that best fits income is items that have a positive effect on the business’s net worth.

Income is money the business earns that increases its net worth. When you sell goods or provide services, revenue adds to assets and increases the owner’s equity, raising the net worth. Expenses, taxes, and other costs reduce net worth, so they are not income. Loans change the balance of assets and liabilities but don’t boost net worth, since they create a liability rather than an additional net asset. So the description that best fits income is items that have a positive effect on the business’s net worth.

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