When expenses exceed revenues, the resulting change in equity is called:
A) Net assets.
B) Net loss.
C) Net income.
D) Negative equity.
E) A liability.

Question

Quizplus · Accepted Answer

When expenses exceed revenues, it results in a negative change in equity, which is known as a net loss. This means that the business has incurred more expenses than its total revenue, resulting in a decrease in its overall equity.

When Expenses Exceed Revenues, the Resulting Change in Equity Is