The equation Revenue - Expenses = Profit/Loss is found on the Income Statement

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The statement under consideration is: Revenue - Expenses = Profit/Loss. 
Option 1: True. 
To analyze, recall that the income statement reports a company’s financial performance over a period of time, showing revenues earned and expenses incurred. The net result, often called net income or profit (or loss if negative), is calculated by subtracting total expenses from total revenues. In other words, Profit/Loss = Revenue − Expenses, which is a direct representation of the core equation used on the income statement. 
There are common sources of confusion that this statement helps to clarify: some people mix up gross profit with net income, or confuse operating income with overall net profit. However, when you subtract all expenses (cost of goods sold, operating expenses, interest, taxes, etc.) from all revenues, you indeed arrive at the bottom-line Profit or Loss for the period. 
Since the equation aligns with the fundamental structure of the income statement, this option correctly states the relationship between revenue, expenses, and profit or loss. 
Note: In many course materials, the same idea may be presented using slightly different phrasing (for example, Net Income = Revenues − Expenses). The essential concept remains the same: revenues minus expenses yield profit or loss, which is the central purpose of the income statement.

VPAB13H3 F LEC01 Week 9 Quiz

The equation Revenue - Expenses = Profit/Loss is found on the Income Statement

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