Answer :
According to the Income Statement, Net Income can be calculated as Revenues MINUS Expenses.
The Income Statement is a financial statement that reports a company's revenues, expenses, and net income over a specific period. It provides valuable information about a company's profitability and financial performance. Net Income is a key figure on the Income Statement and represents the amount of profit or loss generated by the company during the specified period.
The calculation of Net Income is derived by subtracting Expenses from Revenues. Revenues refer to the total amount of income generated from the company's primary operations, such as sales of goods or services. Expenses, on the other hand, encompass all the costs incurred by the company in the process of generating those revenues, including operating expenses, interest expenses, and taxes.
By subtracting the total Expenses from the Revenues, we arrive at the Net Income figure. Net Income indicates the final profit or loss amount after accounting for all the expenses associated with generating the revenues. A positive Net Income implies that the company has generated a profit, while a negative Net Income indicates a loss.
Dividends are not directly subtracted from or added to Net Income in the calculation. Dividends represent the distribution of profits to shareholders and are typically paid out after calculating Net Income. Therefore, they do not impact the determination of Net Income itself on the Income Statement.
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