revenue less all expenses; also called net profit . Other elements involved in computing net income include extraordinary items (net of tax) and cumulative effect of a change in accounting principle (net of tax).

amount of money earned (which is collected or will be collected) from the sale of goods minus the cost of the goods sold; also called gross profit or gross margin. For example, if sales total $4000 and the cost of goods sold is $1200, the gross income is $2800 ($4000 - $1200). Gross profit less operating expenses equals net income.

recognition of income at the time of sale or the rendering of the service. The transfer of title in an arm's length transaction makes the process of earning income complete, as does the delivery of a service.

1. increase in the assets of an organization or the decrease in liabilities during an accounting period, primarily from the organization's operating activities. This may include sales of products (sale), rendering of services (revenues), and earnings from interest, dividends, lease income, and royalties.
2. in government accounting, the gross receipts and receivables from taxes, customs, etc., without consideration of appropriations and allotments.

revenue less all expenses; also called net profit . Other elements involved in computing net income include extraordinary items (net of tax) and cumulative effect of a change in accounting principle (net of tax).

amount of money earned (which is collected or will be collected) from the sale of goods minus the cost of the goods sold; also called gross profit or gross margin. For example, if sales total $4000 and the cost of goods sold is $1200, the gross income is $2800 ($4000 - $1200). Gross profit less operating expenses equals net income.

Individual:adjusted gross income (AGI) less itemized deductions and personal exemption. After taxable income is derived, the tax to be paid can be determined by looking at the tax rate schedules.Corporation:gross income less allowable business deductions.