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Which option explains profit objective correctly?

Answer and explanation

Correct answer: Earning income above cost

The governing concept is the relationship between income and cost. An organisation fulfils its profit objective when the income generated from its operations exceeds the total cost incurred to earn that income. This can be expressed as Profit = Income − Cost; a positive result means profit, while equality means no profit and a lower income means a loss. Option A states this relationship correctly. Option B concerns employee administration and welfare. Option C is a social responsibility activity, and option D concerns customer information or safety. These may support responsible management, but they do not define profit because none compares earnings with expenditure.

Related tags

ProfitCostIncomeFinancial-ObjectiveObjectives Of ManagementNature And Significance Of ManagementBusiness StudiesClass 12 Mcq

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