It is the end of December, and Juan, the owner of a small sporting goods business, is paying the last few expenses for the year. Once all the expenses are paid, the money that is left over will be Juan's profit and is also referred to as:
A. Net income
B. Variable income
C. Retention income
D. Division income
A. Net income
The correct answer is A. Net income.
To determine the correct answer, we can break down the options:
A. Net income: Net income refers to the remaining money after all expenses have been deducted from the revenues or sales. It is a measure of the profitability of a business.
B. Variable income: Variable income refers to income that fluctuates based on various factors, such as sales volume or commission. It is not specifically related to the remaining money after expenses.
C. Retention income: Retention income is not a commonly used term in accounting or finance. It does not accurately describe the concept of the remaining money after expenses.
D. Division income: Division income refers to the income generated by a specific division or department within a company. It is not specifically related to the remaining money after expenses.
Therefore, the correct answer is A. Net income, as it accurately describes the money that is left over after all expenses have been paid, which represents Juan's profit.