Accounting Fundamentals Certification (AFC) 2025 – 400 Free Practice Questions to Pass the Exam

Question: 1 / 400

In accounting, what term describes the money that a business earns?

Profit

Revenue

In accounting, the term that describes the money a business earns is "revenue." Revenue represents the total income generated from sales of goods or services provided by the business during a specific period. It is often referred to as the "top line" figure on an income statement, indicating the effectiveness of a company's core operations in generating sales.

Revenue is crucial because it is the starting point for calculating other financial metrics, such as profit. Profit is derived after subtracting expenses from revenue, while capital refers to the financial assets or resources a business can use for operations, and equity represents the ownership interest in the business after liabilities are deducted. Understanding the definition of revenue is fundamental for analyzing a company's financial health and performance.

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Capital

Equity

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