Question

If the total of the income statement credit column, before determining net income or net loss, exceeds the total of the income statement debit column, the result is a net loss for the year.

a) True
b) False

Answer 1

The statement given is false. If income statement credits exceed debits, it indicates net income, not a net loss.

Step-by-step explanation:

The student's question pertains to the understanding of an income statement in business accounting. If the total of the income statement credit column exceeds the total of the debit column before determining net income or net loss, this indicates that the company has earned more revenue than expenses, resulting in a net income, not a net loss. Therefore, the statement given in the question is false.