Which term refers to the amount of revenue a firm receives for the sale of its products, minus its costs of production, as measured by its accountants?
A) earnings
B) retained earnings
C) economic, or real, profit
D) dividends

Question

Quizplus · Accepted Answer

Earnings refer to the total revenue a firm receives from selling its products or services, minus the costs of production as measured by its accountants. This is often referred to as accounting profit. Retained earnings refer to the portion of earnings that the firm keeps for reinvestment or distribution as dividends. Economic or real profit takes into account not only the explicit costs of production but also the opportunity costs of other choices the firm could have made. Dividends refer to the distribution of profits to shareholders.

Which Term Refers to the Amount of Revenue a Firm