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A business has good sales but its expenses are higher than sales. What is the likely result?

Answer and explanation

Correct answer: The business may incur a loss

Profit is generally calculated by comparing revenue with expenses. When total expenses are greater than sales revenue, the difference is a loss, even if sales appear strong. Good sales alone do not guarantee profit because costs such as materials, wages, rent, transport, and marketing must also be covered. The situation does not automatically mean zero risk or greater loyalty.

Related tags

LossExpensesSalesRevenueIntroduction To EntrepreneurshipEntrepreneurial Skills IArtificial IntelligenceClass 9 Mcq

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