Answer to Question #88370 in Accounting for Kate

Question

What is profit?

Answer 1

Profit - a financial benefit that arises when the amount of income received from a commercial activity exceeds costs and taxes necessary for the conduct of business. Any profit received goes to the business owners, who, however, can reinvest it, i.e. direct to business development.

The profit is calculated by the formula:

Profit = Total income - Total costs