Question

Give an example of when an actual net income would result in a negative number.
a.
When the budgeted expenses exceed the actual expenses, the result is a negative actual net income.
b.
When the actual expenses exceed the actual income, the result would be a negative dollar amount.
c.
When the budgeted income is less than the actual income, the result is a negative actual net income.
d.
When the actual expenses are less than the actual income, the result is a negative dollar amount.

Answer 1

b. When the actual expenses exceed the actual income, actual net income is negative (expenses − income > 0, so income − expenses < 0).