Question

No results found for 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 is not contributing to his 401(k). He is not contributing to his 401(k). 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 spending more money than he makes.

Answer 1

The bottom line of James’s income statement shows a negative number, which indicates that **he is spending more money than he makes.** This means his total expenses exceed his net income by $112, resulting in a deficit in his budget.