Question

When Net income is negative, it is called loss. That occurs when cost of goods sold and expenses are larger than sales.

Answer 1

When a business has a negative net income, it is called a loss. This happens when the cost of goods sold and expenses exceed sales revenue.

Step-by-step explanation:

When a business has a negative net income, it is referred to as a loss. This occurs when the cost of goods sold and expenses are higher than the sales revenue.

For example, if a company spends more on producing and selling its products or services than it earns from customers, it will have a net loss.

Losses can have various causes, such as low demand for products, poor financial management, or excessive expenses.