When a firm, project, transaction, or investment generates more expenses than income or sales, a net loss results.
You have a net loss if your total expenses (the sum of the Debit and Credit columns) exceed your total revenue. The worksheet's Income Statement section's bottom contains a credit for net loss. On the income statement, businesses would list a net loss, which is equivalent to a zero net profit.
The income statement includes revenues and expenses, with the net income or net loss appearing at the bottom. Revenue will be reduced by expenditures and expenses, and the result will either be positive or negative. A net income is a result that is positive, whereas a net loss is a result that is negative.
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