A net loss occurs when:
A)not enough cash exists.
B)total revenues exceed total expenses.
C)total expenses and losses exceed total revenues and gains.
D)total revenues and dividends exceed total expenses and losses.

Question

Quizplus · Accepted Answer

A net loss occurs when the total expenses and losses exceed the total revenues and gains. This means that the company's expenses and losses are greater than its income and gains, resulting in a negative balance. Option A is incorrect because not having enough cash does not necessarily mean a net loss. Option B is incorrect because if total revenues exceed total expenses, then the company has a net income, not a net loss. Option D is incorrect because if total revenues and dividends exceed total expenses and losses, then the company has a net income, not a net loss.

A Net Loss Occurs When