Net Income Definition Kid Friendly

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Net income definition kid friendly. Net income is more commonly known as profit but net income is the proper accounting term and the term that is used on a company s financial statements. Net income example suppose that a company has revenues of 100 production costs of 50 depreciation costs of 10 taxes of 10 and interest payments of 5. Net income definition the excess of revenues and gains of a business over expenses and losses during a given period of time. Net income ni is known as the bottom line as it appears as the last line on the income statement once all expenses interest and taxes have been subtracted from revenues.

Net income is what s leftover of your gross income after you take care of necessary non negotiable expenses. For kids gross income is often an allowance but it can be gift money or funds they earn from their chores or doing under the table jobs. Your net income is calculated by subtracting all allowable deductions from your total income for the year.