The difference between gross income and net income can best be described as:
A)
Gross income is revenue received before any reduction for cost of goods sold,
whereas net income is the revenue received plus cost of goods sold,
operating expenses, and taxes.
B)
Gross income is revenue received before any reduction for cost of goods sold,
whereas net income is the revenue received minus cost of goods sold,
operating expenses, and taxes.
C)
Gross income is the amount of money left over after paying taxes and
salaries, while net income has no adjustment for salaries or taxes.
D)
Gross income is shown on a balance sheet, while net income is shown on an
income statement.

The difference between gross income and net income can best be described as Gross income is revenue received before any reduction for cost of goods sold, whereas net income is the revenue received minus cost of goods sold, operating expenses, and taxes. Thus, option (b) is correct.

What is gross income?

Spending by households and individuals was separated into two categories under the phrase "gross income." The total of all earnings, rent, salaries, dividends, profits, company revenue, interest payments, and other sources of income is referred to as gross income.

The gross income formula of revenue received but subtract all expenses as cost, taxes and interest. The net income is important for gross income. Taxes and deductions are taken from your gross income to arrive at net income.

Therefore, option (b) is correct.

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