Question

Excess of revenue over expenses is called loss.

• A. True
• B. False

Answer 1

The correct option is B False

Net income is the excess of revenues over expenses. This measurement is one of the key indicators of company profitability, along with gross margin and before tax income. For example - revenue of Rs. 10,00,000 and expenses of Rs. 900,000 yield net income of Rs. 100,000. In this example, if the amount of expenses had been higher than revenues, the result would have been termed a net loss rather than a net income.