Trading account statement does not report net of income taxes or net of income.
when net income is zero
Net Income = Sales - ExpensesSo as many expanses net income will be lower.
Cash dividend paid has nothing to deal with net income as net income is calculated first and after that it is distributed. If cash dividend is received then it is included in net income calculations and increases the net income.
If there is a net income, debit Income Summary. If there is a net loss, then credit it.
Net income percentage = Net income / Revenue
Trading account statement does not report net of income taxes or net of income.
Net income percentage = Net income / Revenue
net income is gross income less expenses
Formula for net income is as follows: Net income = sales - expenses net income = 45000 - 25000 net income = 20000
when net income is zero
Net Income = Sales - ExpensesSo as many expanses net income will be lower.
Cash dividend paid has nothing to deal with net income as net income is calculated first and after that it is distributed. If cash dividend is received then it is included in net income calculations and increases the net income.
If there is a net income, debit Income Summary. If there is a net loss, then credit it.
Net profit is not the same as net income. There are many things that can be deducted on a tax return form from net profit that reduce net profit down to net income.
Gross income in normally higher then net income unless there is other income then normal business operations then net income may be higher then gross income.
Net Income = Sales - Gross profit Gross Profit - Cost of Production = Net Income