Lauren is calculating her net income and completes three steps: list all income and expenses; total income and total expenses; then add income and expenses. Which explains Lauren's error?

• A. She added the expenses to the income instead of subtracting them.
• B. She should have subtracted the expenses from the income.
• C. She forgot to include tips.
• D. She miscounted the total income.

Answer: (B)

When calculating net income, you subtract expenses from income to see what remains after costs. If income is 3,000 and expenses are 1,200, the net income should be 1,800. Lauren’s error is finishing by adding the totals, which treats expenses as something to add to income instead of subtracting. This inflates the result and doesn’t reflect money left after paying expenses. The correct approach is to subtract total expenses from total income to obtain net income. The other options describe different issues (omitting tips or miscounting income) that aren’t about the necessary arithmetic step for net income.