COST ACCOUNTING
FINANCIAL TERMINOLOGY
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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When revenues are higher than costs
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When revenues equal costs
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When revenues are less than costs
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Detailed explanation-1: -A net loss is when total expenses (including taxes, fees, interest, and depreciation) exceed the income or revenue produced for a given period of time.
Detailed explanation-2: -If the revenue is greater than expenses, a net profit is earned and if the revenue is less than expenses, a net loss is incurred.
Detailed explanation-3: -What is a business loss? A business loss occurs when your business has more expenses than earnings during an accounting period. The loss means that you spent more than the amount of revenue you made. But, a business loss isn’t all bad-you can use the net operating loss to claim tax refunds for past or future tax years.
Detailed explanation-4: -Subtract the expenses from the revenue and you get your company’s net earnings – it will be a profit or a loss. When your revenue is higher than your expenses, you make a profit. And conversely, when your expenses are higher than your revenue, you’ll see a loss.
Detailed explanation-5: -If the company’s revenue is greater than its expenses, it will have a profit. On the other hand, if a company’s expenses are greater than its revenue, it’s operating at a loss.