If Ol' Fashioned Toys' Revenues Are Less Than Its Expenses

question 73

Multiple Choice

If Ol' Fashioned Toys' revenues are less than its expenses during the accounting period:

• A)owner's withdrawals increase net income.
• B)net income causes liabilities to decrease.
• C)the business will incur a net loss.
• D)owner's withdrawals increase owner's equity.

---

Definitions:

Accounting Profits

The difference between total revenue and explicit costs, representing the net income shown on a company's financial statements.

Implicit Costs

The opportunity costs associated with a company's use of resources that it owns, representing the potential income lost by not using those resources in an alternative way.

Total Revenues

The overall sum of money earned by a business from its sales of goods or services, calculated without deducting any expenses.