An income statement shows revenue of $420,000, cost of goods sold of $310,000, and operating expenses of $72,000. What is net income?
Correct Answer
A) $38,000.
Net income is revenue minus cost of goods sold and operating expenses: $420,000 - $310,000 - $72,000 = $38,000.
Why This Is the Correct Answer
Net income is revenue minus cost of goods sold and operating expenses: $420,000 - $310,000 - $72,000 = $38,000.
Why the Other Options Are Wrong
Option B: $110,000.
$110,000. is above the supported result for income statement; it likely adds an unsupported amount or compares the wrong financial base.
Option C: $348,000.
$348,000. is above the supported result for income statement; it likely adds an unsupported amount or compares the wrong financial base.
Option D: $802,000.
$802,000. is above the supported result for income statement; it likely adds an unsupported amount or compares the wrong financial base.
Memory Technique
Reviewing Contractor'S money test: bucket before math for income statement.
Reference Hint
Study anchor (closed-book): memorize Income statement from CSLB Law and Business Study Guide; CSLB 2026 Law Book / CSLB Law and Business Study Guide Business Finances; know the rule or calculation trigger without relying on exam-room lookup.
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