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A business has total revenues of 55,000 and total expenses of 63,000. What is the net income (or net loss)?

User Mnemosyn
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Final Answer:

The business incurred a net loss of $8,000, calculated as total revenues ($55,000) minus total expenses ($63,000).

Step-by-step explanation:

Net income (or net loss) is determined by subtracting total expenses from total revenues. In this case, the business's total revenues are $55,000, and its total expenses amount to $63,000. The formula for net income (or net loss) is:

Net Income (or Net Loss)

=

Total Revenues

Total Expenses

Net Income (or Net Loss)=Total Revenues−Total Expenses

Substituting the given values:

\text{Net Income (or Net Loss)} = $55,000 - $63,000

Calculating this yields a result of -$8,000, indicating a net loss of $8,000 for the business.

Understanding the net income (or net loss) is crucial for assessing a business's financial performance. In this scenario, the negative value signifies that the total expenses exceeded the total revenues, resulting in a net loss of $8,000. This information is valuable for business owners and stakeholders, helping them make informed decisions to improve financial health and sustainability.

User Remi Lemarchand
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