GED Math Practice Test

Question: 1 / 400

What does the term 'net' refer to in a financial context?

The total income before taxes and expenses

The amount of salary remaining after deducting taxes, expenses, etc.

In a financial context, the term 'net' refers to the amount remaining after all deductions have been made. This typically includes expenses, taxes, and other allowable deductions from gross income. It represents the actual earnings that an individual or organization retains, providing a clearer picture of financial health.

The concept of 'net' is critical for understanding how much money is truly available for savings, investments, or personal use after fulfilling financial obligations. By focusing on this remaining amount, individuals and businesses can make more informed decisions about budgeting and future financial planning.

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The gross income

The total expenses for a given period

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