Net income is determined by subtracting which expenses from revenue?

Net income is calculated by taking total revenue and subtracting all relevant expenses incurred to generate that revenue. This includes operating expenses, which cover the day-to-day costs of running the business, and non-operating expenses, which can include interest, taxes, and other costs not directly tied to core business operations. Therefore, the correct answer reflects the comprehensive nature of expenses involved in calculating net income, which encompasses all operating and non-operating expenses, as well as taxes.

Choosing this response highlights the importance of recognizing that net income is a measure of profitability that provides a complete picture of a company’s financial performance. By including both types of expenses, you understand the total costs impacting the net income, leading to a more accurate financial analysis.