Q11RQ - Horngren'S Financial And Managerial Accounting

Question

If a business had a net loss for the year, where would the net loss be reported on the worksheet?

Step-by-Step Solution

Answer

Answer   

Net loss will be reported in credit side of the income statement and debit side in the balance sheet.

Step 1: Explanation on Worksheet

Worksheet is a financial document which reports the effect the transactions in the various financial statements.

Step 2: Reporting of Net Loss

When expenses (debit side) are higher than the revenues (credit side), then it is loss which will be reported in credit side. This loss will be transferred to debit side of the balance sheet.