If a company's expenses are greater than its revenues for the year,
A) its assets increased during the period.
B) the company incurred a net loss during the period.
C) the company's liabilities must have increased.
D) the company's stockholders' equity must have decreased during the period.

Question

Quizplus · Accepted Answer

If a company's expenses are greater than its revenues for the year, it means that the company incurred a net loss during the period, as its expenses exceeded the amount of money it made from sales. This, in turn, would cause a decrease in the company's stockholders' equity. The answer choices A and C are not necessarily true, as it depends on the specific situation of the company.

If a Company's Expenses Are Greater Than Its Revenues for the Year