What happens if expenses are greater than income?
Answer and explanation
Correct answer: There will be a loss
A business compares its total income or revenue with its total expenses for a period. When expenses are greater than income, the difference is negative and is called a loss. For example, income of ₹30,000 and expenses of ₹35,000 produce a loss of ₹5,000. Therefore, option A is correct. Higher expenses do not create profit, double income, or automatically increase the number of customers.
Frequently asked questions
What is the correct answer to this question?
There will be a loss
Why is this the correct answer?
A business compares its total income or revenue with its total expenses for a period. When expenses are greater than income, the difference is negative and is called a loss. For example, income of ₹30,000 and expenses of ₹35,000 produce a loss of ₹5,000. Therefore, option A is correct. Higher expenses do not create profit, double income, or automatically increase the number of customers.
Which subject and chapter does this question cover?
This is a Class 11 Business Studies question. Chapter: Business, Trade and Commerce.
