Multiple Choice
Which of the following best describes the result of 'sales revenue minus all variable expenses'?
18
views
4. Merchandising Operations
Net Sales
Struggling with Financial Accounting?
Join thousands of students who trust us to help them ace their exams!Watch the first videoMultiple Choice
If a company reports a net loss, it means that:
A
Net sales and total expenses were equal.
B
Net sales were higher than total expenses.
C
Total expenses exceeded net sales during the period.
D
The company had no sales during the period.
Verified step by step guidance1
Understand the concept of net loss: A net loss occurs when a company's total expenses exceed its net sales during a specific period. This means the company spent more money than it earned from its sales.
Analyze the options provided: Evaluate each statement to determine which one aligns with the definition of net loss. For example, if net sales and total expenses were equal, the company would break even, not report a net loss.
Focus on the correct scenario: The correct answer is that total expenses exceeded net sales during the period. This is the only option that matches the definition of net loss.
Consider the implications: A net loss indicates that the company may need to reduce expenses, increase sales, or find alternative revenue sources to improve its financial performance.
Review the financial statement: To confirm a net loss, examine the income statement, where net sales and total expenses are reported. The difference between these two figures will show whether the company experienced a net loss or net income.
9:04mWatch next
Master Net Sales:Sales Discounts (Gross Method) with a bite sized video explanation from Brian
Start learningRelated Videos
Related Practice
