Asked by Trang Nguyen on May 04, 2024
Verified
If the total debit column exceeds the total credit column of the income statement columns on a worksheet then the company has
A) earned net income for the period.
B) an error because debits do not equal credits.
C) suffered a net loss for the period.
D) to make an adjusting entry.
Income Statement Columns
The structure within an income statement that divides financial information into columns, typically including amounts for the current period, budgeted figures, and variances.
Net Income
The net profit of a company calculated after expenses and tax deductions from its total revenue.
Net Loss
The amount by which total expenses exceed total revenues in a company, indicating a financial loss.
- Understand the function and substance of worksheets in the preparation of financial statements.
Verified Answer
GF
Guadalupe Francisco85May 10, 2024
Final Answer :
C
Explanation :
If the total debit column exceeds the total credit column of the income statement columns on a worksheet, it means that expenses exceed revenues and the company has suffered a net loss for the period. This is because expenses are debits and revenues are credits, so if the debit column is greater than the credit column, it means that expenses are higher than revenues. Therefore, the correct choice is C.
Learning Objectives
- Understand the function and substance of worksheets in the preparation of financial statements.