The word ‘net’ is often seen in front of another word.

It indicates that the total of two or more amounts have been combined.

A net amount is used in conjunction with a gross figure.

The net is calculated by making deductions from the gross figure.

Let’s take a look at some examples:

Net Sales – total sales less sales returns, allowances and discounts.

Net Book Value – total value of goods less any accumulated depreciation.

Net Assets – total assets less total liabilities

Net Pay – wages less deductions for tax, NI, pensions etc.

Net Income – total income less all expenses.

Net Loss – if the result from net income is negative than this is referred to an a Net loss.

It is not always clear whether amounts are net or gross figures.

If unsure, don’t be afraid to ask for help.


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