James has prepared his income statement. The bottom line of James income statement shows a negative number. What does this mean? He’s not contributing to his 401(k). He is spending more money than he makes. He spends $200 a month on clothes. He entered the incorrect him out for his rent.

Answer 1

The negative number on James' income statement indicates that he is spending more money than he makes. This is typically referred to as a financial loss or a deficit. It does not necessarily mean that he is not contributing to his 401(k) or that his rent is incorrect. The specific reasons for his negative income could include various expenses exceeded his earnings, such as excessive spending on clothes or an incorrect input for rental expenses.