Future Business Leaders of America (FBLA) Agribusiness Practice Test

What constitutes revenue for a business?

1. The total investments made in the business

2. The funds received from loans

3. The amount earned from sales during the accounting period

4. The total assets owned by the business

The correct answer is: The amount earned from sales during the accounting period

Revenue for a business is defined as the total amount earned from sales of goods or services during a specific accounting period. This amount reflects the business's ability to generate income through its primary operations, which is essential for assessing its financial performance. Revenue is a crucial indicator of a company's success and is typically reported in the income statement. While investments made in the business, funds received from loans, and total assets owned are important financial metrics, they do not directly represent the money made through business operations. Investments and loans pertain to funding and financing activities, while total assets illustrate the resources owned by the business rather than income generated through sales activities. Therefore, the definition of revenue is specifically tied to sales performance, making it the correct choice in this context.