A Company Reported a Net Loss of $30,000 for the Current

question 47

Multiple Choice

A company reported a net loss of $30,000 for the current year, yet its cash balance increased during the year. Which financial statement should management refer to for an explanation of this situation?

• A)Balance Sheet
• B)Income Statement
• C)Statement of Retained Earnings
• D)Statement of Cash Flows

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Definitions:

Continental Rifting

A tectonic process whereby the continental lithosphere stretches and breaks apart, leading to the formation of new ocean basins.

Passive Margin

The transition between oceanic and continental crust that is not an active plate boundary, typically characterized by a broad continental shelf and little seismic activity.

Island Arc

An island arc is a type of archipelago, composed predominantly of a series of volcanoes, which arcs roughly parallel to the boundary of oceanic tectonic plates that are being subducted beneath lighter continental plates.

Continental Rifting

The process by which a continent stretches and splits along a rift zone, potentially leading to the formation of a new ocean basin.