profit equals the total amount of money made minus expenses. a) True b) False

Question:- profit equals the total amount of money made minus expenses. a) True b) False

Answer: a) True

Profit refers to the balance of revenues minus all expenses with a resulting figure that a business or individual gets following the enterprise. It is a traditional financial concept of accounting which is considered to be the final purpose of almost every entrepreneurial undertaking. Profit, in its turn, is the result of the difference between the total revenue’s amount and the costs of goods or service sold. After that, all the entire expenses to be incurring for example, raw materials, labor cost, overhead cost and other operational expenses, should be subtracted from the total revenue. The sum that we obtain is the gain. At the heart of the matter, this is the indicator of business prosperity. The profitability is an important criteria, used by business on a regular basis, to facilitate the process of taking strategic decisions concerning the future activity.