Which statement is true about revenue and profit?

Which statement is true about revenue and profit?

• A. Profit is added to revenue to get costs
• B. Revenue equals profit minus costs
• C. Revenue minus costs equals profit
• D. Costs equal revenue minus profit

Answer: (C)

Profit comes from subtracting costs from revenue. Revenue is the money earned from selling goods or services, and costs are the expenses spent to run the business. When you subtract the costs from the revenue, what’s left is profit. For example, if you earn $50 in revenue and your costs total $30, your profit is $20. That’s why the statement “Revenue minus costs equals profit” is true. The other ways of describing the relationship don’t match how money moves through a business, like saying profit is added to revenue to get costs or that revenue equals profit minus costs. Remember: profit = revenue − costs.

Profit comes from subtracting costs from revenue. Revenue is the money earned from selling goods or services, and costs are the expenses spent to run the business. When you subtract the costs from the revenue, what’s left is profit. For example, if you earn $50 in revenue and your costs total $30, your profit is $20. That’s why the statement “Revenue minus costs equals profit” is true. The other ways of describing the relationship don’t match how money moves through a business, like saying profit is added to revenue to get costs or that revenue equals profit minus costs. Remember: profit = revenue − costs.