balance sheet question?

Question

on a balance sheet, i'm looking at expenses. generally expenses are positive because everyone knows you subtract them from your revenue anyways. but i'm looking at one year, and the company reported negative expenses. what does that mean?

Answer 1

I shall assume you're talking of the income statement since there are no revenues or expenses in the balance sheet.

The expenses portion of the income statement will show you all the expenses. If any expense appears within brackets, that's a negative expense, meaning it's of an income nature. It doesn't happen often, but it can happen. Let's say you wrote off a debt in one year. It would appear as an expense, as "bad debt written off" or something similar. Then the customer pays up next yr. Your expense portion would include the line "bad debt recovered" which is essentially an income item but can appear within brackets among the expenses.

Answer 2

Let me clarify if I get your question right.

First, you don't see expenses in the Balance Sheet. It's in the on the Income Statement.

But still this might help. If the record of expenses are in the credit side or in the negative, there might be misposting or some minor errors with recording which can be corrected by appropriate journal entries.

But if revenue minus expenses equals negative, it simply means the company is losing. There are more expenses than revenues.