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What is the simple meaning of profit?

Answer and explanation

Correct answer: The amount left after subtracting total expenses from total revenue

Profit is the positive surplus obtained when total revenue for a period is greater than the expenses incurred to earn that revenue. In simple form, profit = total revenue − total expenses. For example, if revenue is ₹50,000 and expenses are ₹40,000, profit is ₹10,000. Borrowings are liabilities, not profit, and the number of goods is not a financial result. Therefore, option A is correct.

Related tags

ProfitRevenueExpensesProfit And Loss AccountFinancial Statements IAccountancyClass 11 Mcq

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