The correct answer is A. Expenses are greater than income.
Net loss occurs when a company’s expenses are greater than its income. This means that the company has spent more money than it has earned in a given period of time. A net loss can be caused by a number of factors, such as increased costs, decreased sales, or one-time expenses.
Expenses are the costs that a company incurs in order to operate its business. These costs can include things like salaries, rent, utilities, and marketing expenses. Income is the money that a company earns from its sales. Income can also include things like interest income and investment income.
If a company’s expenses are greater than its income, it will have a net loss. A net loss can be a sign that a company is not doing well financially. It can also be a sign that the company is not managing its costs effectively. If a company has a net loss for a sustained period of time, it may be in financial trouble.
Here is a brief explanation of each option:
- A. Expenses are greater than income. This is the correct answer. When expenses are greater than income, the company has a net loss.
- B. Expenses are less than income. This is the opposite of the correct answer. When expenses are less than income, the company has a net profit.
- C. Expenses = Income. This is the break-even point. When expenses equal income, the company has neither a net loss nor a net profit.
- D. Liabilities are greater than income. This is not related to net loss. Liabilities are the debts that a company owes.