alleryOn a statement of profit or loss, how is a net loss conventionally presented?
AAs a positive number in bold
BOmitted from the statement entirely
CAs a negative number in parentheses
DAdded to total revenue
Answer & Solution
Correct answer: C. As a negative number in parentheses
1. If revenue minus expenses is negative, the result is a net loss.
2. A net loss is typically presented in parentheses as a negative number.
3. It is not shown as a positive figure (A) and is never omitted (C).
4. A loss reduces, rather than adds to, results, so option D is wrong.
5. Therefore a net loss appears in parentheses.
_Source: Jonick, Principles of Financial Accounting (CC BY-SA 4.0), §1.4.1 "Income Statement", p.22_
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