Deductions are categories of expenses and payments that the record company can subtract from your income. What is the correct implication?

Deductions are categories of expenses and payments that the record company can subtract from your income. What is the correct implication?

• A. The more deductions, the more the band earns
• B. Deductions have no impact on earnings
• C. The less that deductions, the more the band earns
• D. Deductions apply only to publishing

Answer: (C)

Deductions reduce the amount of income you actually receive. They are subtractions from what the artist earns, so the more deductions (or larger they are), the less money ends up in the artist’s pocket. In practice, contracts often involve recoupment of advances and expenses, meaning those costs must be paid back before royalties flow through. Therefore, the fewer deductions there are, the more the band earns. The other statements don’t fit: deductions do impact earnings, they aren’t limited only to publishing, and increasing deductions would not increase earnings.

Deductions reduce the amount of income you actually receive. They are subtractions from what the artist earns, so the more deductions (or larger they are), the less money ends up in the artist’s pocket. In practice, contracts often involve recoupment of advances and expenses, meaning those costs must be paid back before royalties flow through. Therefore, the fewer deductions there are, the more the band earns. The other statements don’t fit: deductions do impact earnings, they aren’t limited only to publishing, and increasing deductions would not increase earnings.