If 'Ol Fashioned Toys' revenues are greater than its expenses during the accounting period
A) assets will increase more than liabilities.
B) liabilities will increase more than assets.
C) the business will incur a loss.
D) the business will earn a net income.

Question

Quizplus · Accepted Answer

If 'Ol Fashioned Toys' revenues are greater than its expenses during the accounting period, the business will earn a net income. This means that the company's total income is higher than its total expenses, which is a positive indication for the business. In this scenario, the assets of the company will increase, and the liabilities will remain the same or decrease. Therefore, the correct choice is D.

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