All payments received from clients for services and home care products purchased is known as:

• A. Taxes
• B. Income
• C. Expenses
• D. Compensation

Answer: (B)

The money a business earns from delivering services and selling products to clients is income. This represents the inflow of assets from the core activities of the business and is recorded as revenue on the income statement. It reflects what the business earned, not what it owes or pays out. Taxes are payments to the government, not earnings; expenses are costs of operating the business; compensation refers to wages paid to employees. So the payments received from clients for services and home care products are best described as income.