A loss from operations will result if operating expenses exceed
A)cost of goods sold.
B)selling expenses.
C)cost of goods sold plus non-operating items.
D)gross profit.

Question

Quizplus · Accepted Answer

A loss from operations occurs when operating expenses exceed gross profit, not just the cost of goods sold, selling expenses, or the combination of cost of goods sold and non-operating items. Gross profit is the direct profitability measure from selling goods or services, and operating expenses are the costs to run the day-to-day operations. If these expenses surpass the gross profit, it results in an operational loss.

A Loss from Operations Will Result If Operating Expenses Exceed