Which of the following is an example of a loss?
A)the cost of a product delivered to a customer
B)the cost of a delivered advertising campaign
C)the cost of the purchase of equipment
D)the cost of inventory destroyed in a flood

Question

Quizplus · Accepted Answer

A loss refers to a decrease in an asset's value or the amount of funds that a business loses when its expenses exceed its revenues. Of the given options, the cost of inventory destroyed in a flood represents a loss because the business has lost the value of the inventory due to an uncontrollable event (the flood). The cost of a product delivered to a customer and the cost of a delivered advertising campaign represent expenses, while the cost of the purchase of equipment represents a capital expenditure.

Which of the Following Is an Example of a Loss