Net income is calculated as which of the following?

• A. Revenue minus Expenses
• B. Assets minus Liabilities
• C. Revenue plus Expenses
• D. Equity minus Liabilities

Answer: (A)

Net income measures profitability by showing what's left after all costs are paid. It is calculated by subtracting expenses from revenue. In farming or agribusiness terms, revenue comes from selling crops, livestock, or services, while expenses include things like feed, seed, fuel, labor, and depreciation. If revenue is greater than expenses, net income is positive (a profit); if expenses exceed revenue, you incur a net loss.

The other options describe different financial measures: assets minus liabilities equals equity, which is not net income; revenue plus expenses is not a standard measure of profitability, and equity minus liabilities also equals assets, not net income.