Losses

Accounting Terms Dictionary

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Losses

Ending up with less money than you started with on more than one transaction.

John bought a piece of land for $50,000. He sold it for $45,000. He has a $5,000 loss because he ended up with less than he started with. John bought a 2nd piece of land for $50,000. He sold it for $40,000. He has a $10,000 loss because he ended up with less than he started with. The two transactions would be classified as losses. The losses would be recorded under “Other revenues and expenses” on the income statement and added back to Operating Income on the Statement of Cash Flows.

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