What is indicated when the total income of the enterprise is less than the total expenditure?

• A. Profit
• B. Loss
• C. Break-even
• D. Revenue

Answer: (B)

When the total income of an enterprise is less than the total expenditure, it indicates a loss. This occurs because the business is spending more than it is earning, resulting in a deficit. In financial terms, profit is registered when income exceeds expenditure, signifying a healthy financial operation. Conversely, the opposite situation—where income doesn't cover expenses—reflects that the business is not generating enough revenue to sustain its costs, thereby leading to a loss. The break-even point represents a situation where total income equals total expenditure, meaning there is no profit or loss. The term revenue refers specifically to the total income generated before considering any costs or expenses, and it does not directly indicate a financial outcome like profit or loss. Hence, the scenario described directly aligns with the definition of a loss.