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Profit earn through normal activities of business
- a)operating profit
- b)net profit
- c)gross profit
- d)manufacturing profit
Correct answer is option 'A'. Can you explain this answer?
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Profit earn through normal activities of businessa)operating profitb)n...
Profit earn through normal activities of business:
There are different types of profits that a business can earn through its normal activities. The options provided are:
A. Operating profit:
- Operating profit is the profit earned from the core operations of a business.
- It is calculated by deducting the operating expenses from the gross profit.
- It reflects the profitability of a company's main business activities.
B. Net profit:
- Net profit is the final profit earned by a business after deducting all expenses, including operating expenses, non-operating expenses, and taxes, from the total revenue.
- It represents the overall profitability of the company.
C. Gross profit:
- Gross profit is the profit earned by a business after deducting the cost of goods sold (COGS) from the total revenue.
- It indicates the profitability of the company's sales activities.
D. Manufacturing profit:
- Manufacturing profit refers specifically to the profit earned in the manufacturing sector.
- It represents the difference between the cost of manufacturing a product and the revenue generated from its sale.
Conclusion:
The profit earned through normal business activities can be classified into different types, including operating profit, net profit, gross profit, and manufacturing profit. In the given options, the correct answer is "A. Operating profit."
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There are different types of profits that a business can earn through its normal activities. The options provided are:
A. Operating profit:
- Operating profit is the profit earned from the core operations of a business.
- It is calculated by deducting the operating expenses from the gross profit.
- It reflects the profitability of a company's main business activities.
B. Net profit:
- Net profit is the final profit earned by a business after deducting all expenses, including operating expenses, non-operating expenses, and taxes, from the total revenue.
- It represents the overall profitability of the company.
C. Gross profit:
- Gross profit is the profit earned by a business after deducting the cost of goods sold (COGS) from the total revenue.
- It indicates the profitability of the company's sales activities.
D. Manufacturing profit:
- Manufacturing profit refers specifically to the profit earned in the manufacturing sector.
- It represents the difference between the cost of manufacturing a product and the revenue generated from its sale.
Conclusion:
The profit earned through normal business activities can be classified into different types, including operating profit, net profit, gross profit, and manufacturing profit. In the given options, the correct answer is "A. Operating profit."
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