COST ACCOUNTING
FINANCIAL TERMINOLOGY
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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When revenues are higher than costs
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When revenues equal costs
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When revenues are less than costs
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Detailed explanation-1: -The difference between the revenue and cost (found by subtracting the cost from the revenue) is called the profitThe difference between revenue and cost when revenue exceeds the cost incurred in operating the business..
Detailed explanation-2: -If the company’s revenue is greater than its expenses, it will have a profit.
Detailed explanation-3: -If marginal revenue is greater than marginal cost, a firm will produce that unit of output because it can make a profit on that last unit of output. A firm will not produce that last unit of output where marginal revenue is less than marginal cost because a loss would be made on that last unit of output.
Detailed explanation-4: -Revenue sits at the top of a company’s income statement, making it the top line. Profit, on the other hand, is referred to as the bottom line. Profit is lower than revenue because expenses and liabilities are deducted.