A net loss occurs when:
A) not enough cash exists.
B) total revenues exceed total expenses.
C) total expenses exceed total revenues.
D) total revenues and dividends exceed total expenses.

Question

Quizplus · Accepted Answer

A net loss occurs when total expenses exceed total revenues. This means that the company has incurred more costs than it generated in revenue, resulting in a negative profit or net income. Options A and D are incorrect because they relate to insufficient cash flow, which may or may not be related to a net loss. Option B is the opposite of a net loss and refers to a net profit, where total revenues exceed total expenses.

A Net Loss Occurs When