Question

Net Profit is reflected in higher cash balances and net loss is reflected in lower net worth​

Answer 1

Answer:

true

Explanation:

profit increases cash balance and loss decrease networth (capital)

Answer 2

Answer:

The statement 'net loss is reflected in lower net worth​' is a correct statement.

Explanation:

The net income (loss) for the period raises (decreases) the company's net value (as shown in the ending balance sheet versus the beginning balance sheet). The Cash Flow Statement is a dynamic statement that shows how much money is coming in and going out of the company. A net loss happens when a business's, project's, transaction's, or investment's total expenses exceed its entire income or revenue. On the income statement, businesses would show a net loss or a negative net profit.

Thus, a net loss, also known as a net operating loss, occurs when expenses surpass income or total revenue for a specific period of time.