Question

While calculating operating profit, the following are not taken into account ___________________.

• A. Normal transactions
• B. Abnormal items
• C. Expenses of purely financial nature
• D. None of the above

Answer 1

The correct option is C Expenses of purely financial nature

Operating profit is the profit earned through the normal operations and activities of the business. However, while calculating operating profit expenses which are of financial nature are not taken into consideration. Operating profit is the excess of operating revenue over operating expenses.