5. Which of the following is the correct equation for profit?

A. Revenue - Expenses = Profit

B. Revenue + Expenses = Profit

C. Revenue - Net income = Profit

D. Revenue - Sales costs = Profit

A. Revenue - Expenses = Profit

Explanation:

Profits are the gains resulting from normal business operations. Profits are the main motivation for engaging in commercial activities. A business examines its incomes and expenses periodically to determine if its activities are profitable or not.

Profits are calculated by comparing the revenues and expenses of the business per period. Revenue is the income realized by a business for selling goods or offering services to its customers. Expenses are the costs incurred in offering services or making goods available to customers. The formula for calculating profits is revenue minus expenses.