What is referred to as the ‘bottom line’ on an income statement?

Prepare for ASU ACC231 Exam 2. Utilize multiple choice questions, flashcards, and detailed explanations for each question. Enhance your accounting comprehension and ace your exam!

The term ‘bottom line’ on an income statement specifically refers to net income or loss, which is the final figure that shows the company's profitability after all revenues and expenses have been accounted for. It is found at the bottom of the income statement, hence the name. This figure is crucial as it provides insight into the overall financial health of the company, indicating whether it has made a profit or incurred a loss during the period.

Understanding net income is essential for stakeholders, including investors and management, as it reflects the effectiveness of a company's operations and is often a key indicator of performance in financial analysis.

Subscribe

Get the latest from Examzify

You can unsubscribe at any time. Read our privacy policy