Multiple Choice
Which of the following is calculated as revenue minus expenses?
19
views
4. Merchandising Operations
Net Sales
Struggling with Financial Accounting?
Join thousands of students who trust us to help them ace their exams!Watch the first videoMultiple Choice
The break-even point is where ______.
A
total revenues equal total expenses
B
operating expenses are zero
C
net sales exceed total costs
D
gross profit is maximized
Verified step by step guidance1
Understand the concept of the break-even point: It is the level of sales at which total revenues equal total expenses, meaning there is no profit or loss.
Analyze the options provided in the problem: The correct answer should align with the definition of the break-even point.
Option 1: 'Total revenues equal total expenses' matches the definition of the break-even point, as this is the point where the business neither makes a profit nor incurs a loss.
Option 2: 'Operating expenses are zero' is incorrect because operating expenses are typically present in any business operation, even at the break-even point.
Option 3: 'Net sales exceed total costs' and Option 4: 'Gross profit is maximized' are also incorrect because they describe scenarios beyond the break-even point, where the business is generating profit.
9:04mWatch next
Master Net Sales:Sales Discounts (Gross Method) with a bite sized video explanation from Brian
Start learningRelated Videos
Related Practice
