Question

______ appear in the profit and loss account and are available for distribution as profit, or for creating reserves and funds, for being used in the business.

• A. Capital profit
• B. Revenue Profits
• C. Revenue loss
• D. All of the above

Answer 1

Answer: (B)

Revenue Profits

Revenue profit is the difference between revenue incomes and revenue expenses. It is earned in the ordinary course of the business. It results from the sale of goods and services at a price more than their cost price. Revenue profit is he outcome of regular transactions of the business. It is shown as gross profit and net profit in trading and profit and loss accounts. It is available for the distribution to shareholders as dividendor for creating reserve and fund for various purposes. It shows the efficiency of the business . In fact, earning revenue profit is the main objective of every business.