What term is used to describe all cash earned by a business?

Study for the NCEA Level 1 Business Studies Test. Engage with interactive questions, complete with hints and detailed explanations. Prepare effectively for your exam!

The term that describes all cash earned by a business is revenue. Revenue refers to the total amount of money generated by the sale of goods or services before any expenses are deducted. It is a critical measure of a business's financial performance, indicating how effectively it can generate sales through its operations.

Income, while often used interchangeably with revenue in everyday language, typically refers to the net earnings of the business after expenses, taxes, and costs have been subtracted from the revenue. Thus, while income is an important financial metric, it does not encompass the full scope of cash inflows before any deductions.

Profit represents the financial gain remaining after all costs have been subtracted from revenue, serving as an indicator of a company's profitability. Likewise, capital refers to financial resources or assets that a business uses to generate revenue but does not directly measure the cash earned.

In summary, revenue specifically captures the total cash inflow from business activities, making it the correct term for describing all cash earned by a business.

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