Question

True or false a loss occurs any time total renege is greater than total cost?

Answer 1

Loss occurs when expenses exceed the income or total revenue produced for a given period of time. For tax purposes, net losses in one time period can be used to counteract the income/gains generated in another time period. Under tax law, this loss can be carried back as far as two years. So, the statement, that a loss occurs any time total revenue is greater than total cost is false.