Profit is the amount of money that a business firm earns after deducting its total expenses from its total revenues. It is the reward for the risk undertaken by the firm in marketing its offerings. Option B best defines profit as it includes the concept of expenses and revenues, which are essential components of calculating profit. The other options, such as A, C, D, and E, do not fully define the concept of profit.

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Profit Refers to

Question 5

Multiple Choice

Profit refers to

A) the point at which company assets equal company liabilities.
B) the money left over after a business firm's total expenses are subtracted from its total revenues and is the reward for the risk it undertakes in marketing its offerings.
C) the difference in initial and final selling price of a good or service, provided the figure is positive.
D) the money earned when the economic order quantity is maintained.
E) the total amount of revenue accrued through product sales or service distribution.

Correct Answer: