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Importance of Accounting - Calculation of Net Income (Accounting) in Academic Curriculum
Net Income (NI) is the sum or amount which remains as profit for the company or individual after deducting or debiting salaries, losses incurred by a depreciation of any assets, taxes and other expenses. This shows the amount which could be divided among the shareholders of a company in terms of dividends. In academic curriculum knowledge of the net income becomes highly essential to know whether a company is run on a profit or loss basis and to know whether the value of the company is worth investing in from the point of view of the shareholders. Also, students should be aware that the net income is represented in the bottom line of the accounting system.
Difficulties encountered in solutions to Calculation of Net Income (Accounting) problems
The major issue with regard to calculation of the net income is to consider, first of all, all sources of income of a company, which is where the real challenge lies and then going for the expenditure and other liabilities such as salaries, investments, taxes, and so on. This arena seems to be easy written than when problems based on net income have to be solved. The student should know how the earnings from any liability should be included under profit and how expenditure should be incurred as a loss. These concepts will be demanding and burdening for a student who has taken accounting as part of the academic curriculum for it is in the hands of experts that such activity would be a child's play.
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