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.