Asked by Marisa Mckay on May 11, 2024
Verified
Which of the following combinations results in a net loss reported on the income statement?
A) Total revenues of $80,000 and total expenses of $74,000.
B) Total revenues of $70,000 and total expenses of $74,000.
C) Total revenues of $60,000 and total expenses of $52,000.
D) Total revenues of $20,000 and total expenses of $16,000.
E) Total revenues of $40,000 and total expenses of $31,000.
Net Loss
Refers to the situation where a company's expenses exceed its revenues within a specific accounting period, leading to a negative income.
Income Statement
A document summarizing the financial outcomes of a business over a given accounting period, including details on income, costs, and overall profit.
- Compute the net earnings and variations in equity arising from business activities and dealings.
Verified Answer
HV
Hemangi VaghelaMay 18, 2024
Final Answer :
B
Explanation :
Total revenues of $70,000 and total expenses of $74,000 result in a net loss. This means that the company is spending more than it is earning, which is not sustainable in the long run.
Learning Objectives
- Compute the net earnings and variations in equity arising from business activities and dealings.