What is the correct difference between profit and revenue?
Answer and explanation
Correct answer: Revenue is total sales income, while profit is what remains after expenses
Revenue is the income earned from sales or business operations before deducting business expenses. Profit is the surplus left after relevant expenses are subtracted from revenue; if expenses exceed revenue, there is a loss instead. Borrowed money is financing, not revenue. Since profit is calculated from revenue after costs, the two terms are not interchangeable.
Frequently asked questions
What is the correct answer to this question?
Revenue is total sales income, while profit is what remains after expenses
Why is this the correct answer?
Revenue is the income earned from sales or business operations before deducting business expenses. Profit is the surplus left after relevant expenses are subtracted from revenue; if expenses exceed revenue, there is a loss instead. Borrowed money is financing, not revenue. Since profit is calculated from revenue after costs, the two terms are not interchangeable.
Which subject and chapter does this question cover?
This is a Class 11 Business Studies question. Chapter: Sources of Business Finance. Topic: Concept, nature and importance of business finance.
