When a company has suffered a net loss, the net loss amount is entered on the work sheet on the
A) credit side of the Income Statement columns and the debit side of the Balance Sheet columns.
B) credit side of both the Income Statement and the Balance Sheet columns.
C) debit side of the Income Statement columns and the credit side of the Balance Sheet columns.
D) debit side of both the Income Statement and the Balance Sheet columns.

Question

Quizplus · Accepted Answer

A net loss is entered as a credit in the Income Statement columns to balance the expenses exceeding revenues, and as a debit in the Balance Sheet columns to reduce the owner's equity.

When a Company Has Suffered a Net Loss, the Net