When expenses exceed revenues,
A)a liability is created.
B)a net loss occurs.
C)owner's equity increases.
D)All of these choices.

Name: When expenses exceed revenues, A)a liability is created. B)a net loss occurs. C)owner's equity increases. D)All of these choices.
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Question

Quizplus · Accepted Answer

Expenses exceeding revenues means that the company has incurred a net loss, which decreases owner's equity. This does not create a liability, as a liability is a debt owed by the company.

When Expenses Exceed Revenues