Which term describes the difference between income and expenses?

The term that describes the difference between income and expenses is referred to as profit or loss. This term encapsulates the concept of determining profitability; when income exceeds expenses, there is a profit, and when expenses exceed income, there is a loss. This measure is crucial for businesses as it helps assess financial performance over a specific period.

While net income often refers to the final profit figure after all expenses, taxes, and costs have been deducted, the term profit or loss directly highlights the fundamental relationship between income and expenses, making it the more immediate answer for the question posed. Other terms like revenue refer specifically to the total income generated, and capital gains relate to profits from the sale of an asset. Therefore, in the context of the difference between income and expenses, profit or loss is the most accurate and widely used term.