Which of these components does a business exclude from its net income under “operating surplus”?

Question

Question: Which of these components does a business exclude from its net income under “operating surplus”?

Options:

1. Money it will pay as dividends to shareholders
2. Money it will keep aside as retained profits
3. Money it will pay as direct taxes
4. Money paid as salaries or wages to employees

Answer 1

4. Money paid as salaries or wages to employees

Business exclude Money paid as salaries or wages to employees from its net income under “operating surplus”.

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More info:

Money paid to the employees as salaries represents the amount of monetary an entity obtain after deducting all expenses incurred during the operation.

Salaries or wages to an employee are part of these operating costs.

As salaries for employees go up, the amount of income a business has in the future will be reduced.