Profit is defined as which of the following?

Profit is defined as which of the following?

• A. Amount by which your income is higher than your expenditure
• B. The total revenue of a business
• C. The sum of capital invested
• D. The amount of taxes paid

Answer: (A)

Profit is the amount by which revenue exceeds expenses. It represents the money left over after paying the costs of earning that income. If income is higher than expenditure, you have a positive profit, which is exactly what the option describes. In business terms, you might also hear about different profit measures (like gross or net profit), but the core idea remains the same: profit is the surplus after costs. The other concepts—total revenue (all income before costs), capital invested (funds put into the venture), and taxes paid (payments to the government)—do not by themselves equal profit because they don’t reflect subtracting costs from income.

Profit is the amount by which revenue exceeds expenses. It represents the money left over after paying the costs of earning that income. If income is higher than expenditure, you have a positive profit, which is exactly what the option describes.

In business terms, you might also hear about different profit measures (like gross or net profit), but the core idea remains the same: profit is the surplus after costs. The other concepts—total revenue (all income before costs), capital invested (funds put into the venture), and taxes paid (payments to the government)—do not by themselves equal profit because they don’t reflect subtracting costs from income.