How is a net loss shown on the statement of revenue and expense in a community association budget?

• A. The figure is placed in parentheses when expenses exceed revenue.
• B. A negative sign is used to indicate a loss.
• C. It is shown as a separate line labeled "Loss."
• D. It is not reported separately from net income.

Answer: (A)

The main idea is how deficits are shown on a revenue and expense statement. When a community association spends more than it earns, the net result is a loss. The standard way to present that on the statement is to put the loss amount in parentheses, signaling a negative value on the bottom line. This parentheses convention makes the deficit quickly identifiable and is a common, clear formatting choice in budget reports. While some formats might use a negative sign, the parentheses format is the typical method used in these statements. A separate line labeled “Loss” isn’t required for the bottom line, and you do need to show the negative result rather than hiding it.