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In which situation is the profit objective being fulfilled?

Answer and explanation

Correct answer: The company earns income more than expenses

The governing financial concept is profit. Profit is the positive difference between revenue or income earned and the costs or expenses incurred in producing and selling goods or services. In simple form, Profit = Total Revenue − Total Cost. Therefore, when income is greater than expenses, as stated in option A, the profit objective is being fulfilled. Option B represents environmental or social responsibility. Option C relates to employee welfare and a personal objective. Option D reflects customer information and protection. Those activities may be valuable, but none establishes that the organisation has earned more than it has spent.

Related tags

ProfitIncomeExpensesRevenue-CostObjectives Of ManagementNature And Significance Of ManagementBusiness StudiesClass 12 Mcq

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