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A company's income statement shows that their financial picture is headed in a negative direction rather than a positive direction. What must be true in this situation?
A. The company likely had more expenses than revenue.
B.The company likely has more revenue than expenses.
C. The company likely sold a large amount of goods recently.
D. They must have had huge gains in longterm assets.

Respuesta :

darshini
It’s A as all the other answers indicate a positive direction , however the income statement shows it’s heading a negative thus the answer is A

If a company's income statement shows that the financial picture of the firm is headed in a negative direction it means that the company likely had more expenses than revenue.

The three types of financial statements of a company are:

1. The income statement: it is a financial statement that contains information of a company's revenue and expenditures. The components of an income statement are:

  • revenue
  • cost of goods sold
  • gross profit  
  • expenses.
  • net profit

 When the revenues of a company exceeds its cost, the company earns a profit. If the cost is greater than the revenue, the firm makes a loss.

2. Statement of Changes in Owner's Equity: it contains information on the owners equity and changes to the owners equity.

3. Balance sheet: it is a financial statement that contains information on a company's assets, liabilities and shareholders' equity.

To learn more, please check: https://brainly.com/question/14308954?referrer=searchResults

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