A net loss results:
A)when revenue is greater than expenses.
B)when expenses are greater than assets.
C)when expenses are greater than revenue.
D)when assets are greater than liabilities.

Question

Quizplus · Accepted Answer

A net loss results when expenses are greater than revenue, indicating that the company is not generating enough income to cover its expenses. This is the opposite of a net profit, which results when revenue is greater than expenses. Option A is incorrect because it describes a profitable situation, not a loss. Option B is incorrect because it refers to a comparison between expenses and assets, which are not directly related to each other. Option D is incorrect because it describes a situation where the company has more assets than debts, which is not necessarily indicative of a loss.

A Net Loss Results