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.
Frequently asked questions
What is the correct answer to this question?
The amount left after subtracting total expenses from total revenue
Why is this the correct answer?
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.
Which subject and chapter does this question cover?
This is a Class 11 Accountancy question. Chapter: Financial Statements I. Topic: Profit and Loss Account.
