What term describes money a business earns after all expenses are paid?

• A. Revenue
• B. Profit
• C. Budget
• D. Loss

Answer: (B)

Profit is the money a business earns after all expenses are paid. This is what remains once costs like materials, wages, and overhead have been subtracted from the revenue generated by sales. Revenue is the total income from sales before costs are taken out. A budget is just a plan for expected income and spending, not the actual earnings, and a loss occurs when expenses are greater than revenue, resulting in negative money. For example, if a shop brings in $1,000 from sales and spends $800 on costs, the profit is $200. Profit best describes the amount left after paying all expenses.