will a larger gauge wire used to extend and outlet prevent power loss
Absolutely.  You are always allowed to upsize the wire.  You will need to pigtail the ends of the wires onto a smaller wire so it will fit on the terminals at both ends.  

I gather you've recently visited a voltage drop calculator.  A few tricks on using those effectively: 


Use the Ampere rating of the actual loads you will be powering, never use the amps of the breaker trip.  In fact, if your load is more than 80% of breaker trip (16A for a 20A  breaker), that means you're overloading the circuit.  So you should never put more than 16A for a 20A circuit. 
3% is not gospel.  The best practice is to limit voltage drop to 8% from the service panel to the final load, so you should separately add up voltage drop for each wiring segment.  Often with those calcs, if you change the number to 4%, you find that the next smaller wire would have worked at, say 3.3% (which is perfectly fine).  
Make sure you select 120V or 240V correctly. 
Distance is one-way (on most of them). It's automatically calculating for both directions of voltage drop.