Earnings or gains in a business arising from its activities.Select one:a.Expensesb.Capitalc.Revenued.Statement of Financial Position
Question
Earnings or gains in a business arising from its activities.
Select one:
- a. Expenses
- b. Capital
- c. Revenue.
Statement of Financial Position
Solution
The correct answer is c. Revenue.
Explanation
Revenue refers to the income generated from normal business operations and includes sales of goods and services. It is a crucial component of a company's financial performance and is reported on the income statement.
- Expenses are costs incurred in the process of earning revenue.
- Capital generally refers to financial assets or the funds used to start or grow a business, not the income generated from operations.
Understanding these terms is important for analyzing business performance, where revenue highlights the effectiveness of operations, while expenses and capital considerations reflect on overall financial health.
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