In accounting terms, profits are ______.
A) the difference between revenues and expenses
B) the difference between commissions earned and receipts
C) the difference between sales and expenses
D) the sum of sales and expenses

Question

Quizplus · Accepted Answer

Profits are commonly defined as the difference between revenues and expenses. This means that the amount of money a company makes after subtracting its costs and expenses from its total revenue. Option B is incorrect because it refers to commissions earned and receipts, which are not synonymous with profits. Option C is similar to Option A, but it refers specifically to sales, which may not be the same as revenues. Option D is incorrect because it suggests that profits are the sum of sales and expenses, which is not true.

In Accounting Terms, Profits Are ______