Question

While calculating Operating profit the incomes and expenses of purely ____________ nature are not taken into account.

• A. operating
• B. trading
• C. financial
• D. non financial

Answer 1

The correct option is C financial

Operating profit is defined as the profit earned by the firm during the course of normal trading operations. To calculate the operating profit, operational expenses are deducted from operational income.

Expense of purely of financial nature need not to be taken into account while calculating the operational profit like interest on loan, dividends etc.