Income refers to the money or monetary value received by an individual or business in exchange for labor, goods, services, or investments. For businesses, income typically represents revenue from sales or services. For individuals, income can include salaries, wages, dividends, interest, or profits.
Scenario:
Let’s consider a freelance graphic designer named Sarah. Sarah offers logo design services, and each service is charged at $200. If Sarah completes five logo design projects in a month, she will earn $1,000 for that month. This amount is her gross income from her design services.
Now, let’s look at Sarah’s scenario in a business context:
Income Before Expenses: Sarah earned $1,000 in total.
Expenses:
She had expenses of $100 for software subscriptions and design resources.
Net Income: After deducting expenses, Sarah’s net income for the month is $900.