If 'Ol Fashioned Toys' revenues are less than its expenses during the accounting period
A) owner's withdrawals decrease net income.
B) net income causes liabilities to decrease.
C) the business will incur a loss.
D) owner's withdrawals increase owner's equity.

Question

Quizplus · Accepted Answer

If 'Ol Fashioned Toys' revenues are less than its expenses during the accounting period, it means the business has incurred a loss for that period. This loss is reflected in the income statement as a negative net income figure. This is not related to owner's withdrawals, liabilities, or owner's equity.

If 'Ol Fashioned Toys' Revenues Are Less Than Its Expenses