Answer:
The corret answer is b.The firm is generating a loss.
Explanation:
The word loss is used to refer to situations with negative results. Negative results will arise when the expenses exceed the income.
It is key to keep in mind that an expense will generate the possibility of obtaining income, while a loss will not create the present or future possibility of obtaining income as a result of it. Some examples of accounting losses may be damaged goods or deterioration in the value of the shares.
In order to talk about an accounting loss, the following circumstances must occur:
