Use the information given below to answer the following questions:
During 2012, Bull Ltd earned revenues of $500 and incurred expenses of $650. Retained profits at 1 January 2012 were $400, and at 31 December 2012 they were $225. At 31 December 2012, assets totalled $1125 and share capital $300. There were no transfers to reserves during 2012.
-What was the net profit or loss of Bull Ltd for the year?
A) net profit $150
B) net profit $500
C) net loss $150
D) net loss $500.

Question

Quizplus · Accepted Answer

Net profit or loss can be calculated using the formula:
Net profit or loss = Revenues - Expenses
Net profit or loss = $500 - $650 = -$150
Since the result is negative, it is a net loss of $150. Therefore, the correct answer is option C.

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