Difference
between income and profit
There is no difference
between net income and profit, and both term is used interchangeably, however,
term Gross income is quite different from net income and used to describe the revenue.
The relationship between these terms has been explained below;
Net
income
|
= (Equal)
|
Profit
|
Gross
income
|
= (Equal)
|
Revenue
|
How
net income is calculated?
Net income is calculated
by deducting expenses from the gross income. For example ABC Company made Sales
of $ 10,000 and cost of goods sold were $ 8,000, then in this case the Gross
income is $ 10,000 and net income is $ 2,000 ($ 10,000 - $ 8,000)
