Question

question 11 of 25
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a net loss will result during a time period when
expenses exceed revenues.
liabilities exceed assets.
drawings exceed investments.
revenues exceed expenses.
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Explanation:

To determine when a net loss occurs, we analyze each option:

• "Expenses exceed revenues": Net income (or loss) is calculated as Revenues - Expenses. If expenses are greater than revenues, the result is a net loss.
• "Liabilities exceed assets": This relates to the accounting equation (Assets = Liabilities + Equity) and indicates a deficit in equity but not directly a net loss (which is about revenue and expense over a period).
• "Drawings exceed investments": Drawings and investments relate to owner's equity transactions, not the revenue - expense calculation for net loss.
• "Revenues exceed expenses": This would result in a net income, not a loss.

So the correct option is the one where expenses exceed revenues.

Answer:

A. expenses exceed revenues.