FINRA Series 7 – General Securities Representative — Question 5

Which of the following items is not deducted to determine a corporation’s net income?

Answer options

• A. taxes
• B. dividends
• C. interest
• D. all of the above

Correct answer: B, A, A, D, D, D, C, D, D, B, D, D, D

Explanation

Dividends are not considered an expense when determining net income; they are a distribution of profit to shareholders. In contrast, taxes and interest are legitimate expenses that are deducted from revenue to calculate net income.