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    Net Income for Tax Purposes and Taxable Income

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    Explain the terms net income for tax purposes and taxable income.

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    Net income for tax purposes: A company's total earnings (or profit). Net income is calculated by taking revenues and adjusting for the cost of doing business, depreciation, interest, taxes and other expenses. This number is found on a company's income statement and is an important measure of how profitable the company is over a period of time. The measure is also used to calculate earnings per share. Often referred to as "the bottom line" since net income is ...

    Solution Summary

    This solution discusses net income and taxable income.