Earned income and capital gains (or portfolio income) are acquired in different ways. which statement describes how they are different?

A. Earned income and capital gains are both based on the number of hours you work.

B. Earned income is payment for employment, while capital gains are produced by your investments.

C. Capital gains are received if you manage the company, but earned income is received if you are an employee of the company.

D. Earned income is when you make the investment directly, but capital gains are when someone else has managed your investments.

ANSWER

The correct option is B.

Earned income refers to income generated from employment, that is, the wages or the salary that one is been paid on a regular basis for doing a particular work. Capital gain on the other hand refers to the income one make through investments or sales of items.

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answer: 140

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