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The income statement begins with revenue and subtracts various operating expenses until arriving at Earnings Before Interest and Taxes. Next, interest expense is subtracted to find the ________ for the period.

A) EBIT
B) after-tax income
C) net income
D) taxable income

Respuesta :

Answer:

D) taxable income

Explanation:

A typical income statement is as shown below.

                                                               Amount in

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000

Revenue                                                   xxx

Cost of sales                                             (xx)

Gross profit                                               xxx

Operating expenses

Selling and distribution expense            (xx)

Other administrative expenses               (xx)

Operating profit                                        xxx

Interest expense                                       (xx)  

Income before tax                                     xxx

Tax expense                                             (xx)

Net income after tax                                  xxx  

From the illustration above, interest expense is subtracted to find the taxable income.

Option D) taxable income.

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