For the previous year,Marilyn's Italian Restaurant had a total of $320,000 in expenses and $295,000 in revenues.Marilyn's
A) had a net income of $325,000 for the year.
B) had a net loss of $25,000 for the year.
C) lost $25,000 in revenues.
D) acquired an additional $295,000 in assets.
E) increased its stockholders' equity by $25,000.

Question

Quizplus · Accepted Answer

To calculate the net income, we subtract the total expenses from the total revenue. Therefore, Marilyn's Italian Restaurant had a net loss of $25,000 ($295,000 - $320,000 = -$25,000). Option A is incorrect as it suggests the net income is positive, which is not the case. Option C is incorrect as it states that the restaurant lost $25,000 in revenues, which is not accurate. Option D is incorrect as it suggests that the restaurant acquired assets, which is not mentioned in the given information. Option E is incorrect as it suggests an increase in stockholders' equity, which is not mentioned in the given information.

For the Previous Year,Marilyn's Italian Restaurant Had a Total of $320,000