Net profit is defined as which of the following?

• A. Revenue minus expenses (assuming a positive number)
• B. Revenue minus COGS
• C. Revenue only
• D. Expenses only

Answer: (A)

Net profit is the bottom-line amount a business keeps after all costs are paid. It is calculated by taking total revenue and subtracting total expenses (including COGS, operating expenses, interest, taxes, depreciation, etc.). This is why the correct choice is revenue minus expenses—the full amount remaining after every cost has been accounted for. Subtracting only COGS gives gross profit, which doesn’t reflect all other costs. Revenue alone ignores costs, and expenses alone aren’t a measure of profitability. Net profit can be negative if expenses exceed revenue (a net loss). Example: revenue 100, COGS 60, other expenses 25 → net profit 15.