The bottom line of James’s income statement shows a negative number, which means:
He is spending more money than he makes.
This indicates that his total expenses ($2,912) exceed his total net income ($2,800) by $112.
James has prepared his income statement:
Income
Salary 3,500
Tax withholding (490)
401(k) 0
Health insurance (210)
Net salary 2,800
Total net income $2,800.00
Expenses
Rent (900)
Utilities (325)
Internet (62)
Credit card payments (200)
Food (625)
Clothes (200)
Transportation (200)
Entertainment (400)
Total expenses $2,912.00
Difference ($112.00)
The bottom line of James’s income statement shows a negative number. What does this mean?
(1 point)
Responses
He spends $200 a month on clothes.
He spends $200 a month on clothes.
He entered the incorrect amount for his rent.
He entered the incorrect amount for his rent.
He is not contributing to his 401(k).
He is not contributing to his 401(k).
He is spending more money than he makes.
1 answer
1 answer