Net income is the main source of income for an enterprise

The net income of an enterprise is the difference between the total cost of production and the sale price. It is the main source of income of the state budget and the monetary balance of the enterprise. Net income is included in the gross income of the organization remaining after the payment of wages. The net income of the industrial economy is a combination of profit and turnover tax, although in different sectors they represent different forms. In heavy industry, the main source of income is profit, while the turnover tax prevails in light industry.

Before calculating the net income of an enterprise, it is necessary to determine the potential income and the exact calculation of the costs of the enterprise. Net income - this is a very important indicator in accounting, it is on it that you can calculate the value stated in the bid offer. Calculate it is fairly simple, it is enough to subtract the number of expenses from total revenues. Well, if this number is a plus sign, and the more, the better. The net income of a society acts as an additional product and is a part of the national income. Moreover, the division of the national income into a surplus product and the necessary is an obligatory economic aspect, regardless of the methods of social production. Net operating income is the income of the enterprise for the year that the property on its balance sheet (for example, from leasing it or from using it by others), minus the cost of its maintenance.

In capitalism, a pure product appears in a variety of surplus product with surplus value. Net income, according to Karl Marx, is a by-product of exploitation of the working people. The process of redistribution divided the net income of capitalist society into two basic monetary forms-profit and rent. Net income in a socialist society is not surplus value, and being a derivative of surplus product, it is used for the needs of the whole society. It follows that the net income of a socialist society consists of a combination of the net income of cooperative-collective-farm activity and the net income of state or national activity. At the same time, the public sector represents net income in cash in the form of profit from enterprises and a turnover tax, while the cooperative-collective-farm sector can have a net income not only in cash, but also in kind.

The net centralized income of the state is payments of state enterprises, turnover tax and social insurance contributions. At the same time, cooperative and collective farm enterprises make their contribution to the centralized fund in the form of insurance premiums and income tax. The net centralized income goes to the state's expenses in the planned order for the needs of citizens (financing the national economy, covering the costs of the army and administration, the formation of public and reserve funds). Part of the money coming into the state treasury is spent on reimbursement of production costs - electricity, used raw materials, semi-finished products. In such economic conditions, the remaining part of the proceeds is nothing more than gross income. The gross income of the enterprise is a source of creation of financial resources of off-budget funds and the state budget, and not only industrial enterprises.

The net reduced income of an enterprise is the aggregate of all enterprises' incomes for a certain number, less all maintenance costs, taxes and other financial costs.