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CLEP Financial Accounting Review: Net income

Review net income for this CLEP Financial Accounting question with the key prompt clue, correct-answer reasoning, distractor checks, and sources to verify next.

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This question-specific review guide is tied to the answer reasoning for a PracticeTestVault item. Use it after you answer the question so the review stays focused on what the prompt actually tested.

What this question is testing

Objective: Net income

Prompt focus: A company reports revenues of 500,000, cost of goods sold of 300,000, and operating expenses of 120,000. Its net income, ignoring taxes, is:

Why the correct answer works

80,000

Correct. Revenues 500,000 minus cost of goods sold 300,000 minus operating expenses 120,000 equals net income of 80,000.

Why the tempting wrong answer fails

The tempting wrong answer usually loses because it skips the key condition, priority, or evidence in the prompt.

Plain-language takeaway

Use the rationale to connect the prompt clue, the correct choice, and the tested objective before retaking a similar item.

Simple analogy

Think of net income like following a short checklist: identify the clue, confirm the rule, and then make the move that fits this exact scenario.

How to review it before a retake

  • Underline the command word and name what the question is asking before rereading the choices.
  • Compare the correct answer against the closest distractor and write the exact detail that separates them.
  • Retest this objective with a fresh question without looking at the rationale first.

Sources to verify next