COST ACCOUNTING
COST ACCOUNTING STANDARDS
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Question
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The amount a business earns after subtracting all expenses incurred to generate revenues; also called profit or earnings
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Arises when total expenses are more than revenues (sales). The excess of expenses over revenues for a period
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Detailed explanation-1: -A net loss occurs when the sum total of expenses exceeds the total income or revenue generated by a business, project, transaction, or investment. Businesses would report a net loss on the income statement, effectively as a negative net profit.
Detailed explanation-2: -A net loss occurs when a company’s expenses are higher than its total revenue.
Detailed explanation-3: -The net loss formula can be calculated by subtracting revenue from expenses. For example, if a company’s revenue was $100 and its expenses were $60, the company would have a net loss of $40. Since there is a total cost of $350, 000, then the net loss would be $400, 000.
Detailed explanation-4: -Your net income or net loss equals your total revenues minus your total expenses for an accounting period. If your revenues are greater than expenses, you have net income. If revenues are less than expenses, you have a net loss.
Detailed explanation-5: -When total expenses exceed total revenues, the result is a net loss. The difference between the revenues and the expenses can result in either a profit or loss.