A Profit Is Made When

question 1

Multiple Choice

A profit is made when

• A) Total contribution is greater than fixed costs
• B) Total contribution is less than fixed costs
• C) Total contribution is equal to variable costs
• D) Total contribution is greater than variable costs.

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Definitions:

Owner's Equity

The residual interest in the assets of the entity after deducting liabilities, representing the ownership interest of the business owners.

Cash Withdrawals

The act of taking money out of an account, decreasing the account balance.

Assets

Resources owned or controlled by a company or individual with the expectation that they will provide future benefit.

Accounting Equation

A fundamental financial principle representing the relationship between a company's assets, liabilities, and shareholder's equity: Assets = Liabilities + Equity.