Question

Which of the following accurately explains how profit is calculated?

Answer 1

Answer:

Costs are subtracted from revenues.

Answer 2

Answer:

Explanation:

Profit can be calculated in many ways. But to find profit, you must take your total earnings and subtract it by your expenses. Showing your profit.

Example equation:

T-E=P

(P: Profit.)

(E: Expenses)

(T: Total Earnings)

Remember, expense includes tax too. Before you can cash out a check, it goes through your taxes and removes the amount for the pay of the tax(es).