What is the term used when a business makes money?

What is the term used when a business makes money?

• A. Shows a profit
• B. Breaks even
• C. Runs at a loss
• D. Invests in assets

Answer: (A)

Profit happens when what a business brings in from selling goods or services exceeds what it spends. In practical terms, that positive difference is what you see as net income on financial statements. So, when a business makes money, it shows a profit. If revenue covers costs exactly, the business breaks even—no profit, no loss. If costs exceed revenue, the business runs at a loss. Investing in assets refers to spending money to acquire things that help the business operate or grow, which is about where money goes rather than the outcome of making money itself.

Profit happens when what a business brings in from selling goods or services exceeds what it spends. In practical terms, that positive difference is what you see as net income on financial statements. So, when a business makes money, it shows a profit.

If revenue covers costs exactly, the business breaks even—no profit, no loss. If costs exceed revenue, the business runs at a loss. Investing in assets refers to spending money to acquire things that help the business operate or grow, which is about where money goes rather than the outcome of making money itself.