Excess revenue over expense is also known as which of the following?

Excess revenue over expense is also known as which of the following?

• A. Net Loss
• B. Net Gain
• C. Cash Flow
• D. Gross Profit

Answer: (B)

When revenue exceeds expenses, the organization has a surplus for the period. This positive bottom line is called net income, and many contexts also refer to it as net gain. For a community association, this means more money came in from assessments, fees, or other income than was spent on maintenance, utilities, staff, and other operating costs, leaving extra funds that can strengthen reserves or reduce future dues. Seeing it this way helps distinguish the possibilities: a net loss happens when expenses surpass revenue; cash flow is about the actual movement of cash in and out, which can differ from overall profit; and gross profit is revenue minus the direct costs of goods sold, a concept more relevant to product-based businesses than the overall financial picture of an association.

When revenue exceeds expenses, the organization has a surplus for the period. This positive bottom line is called net income, and many contexts also refer to it as net gain. For a community association, this means more money came in from assessments, fees, or other income than was spent on maintenance, utilities, staff, and other operating costs, leaving extra funds that can strengthen reserves or reduce future dues.

Seeing it this way helps distinguish the possibilities: a net loss happens when expenses surpass revenue; cash flow is about the actual movement of cash in and out, which can differ from overall profit; and gross profit is revenue minus the direct costs of goods sold, a concept more relevant to product-based businesses than the overall financial picture of an association.