Question

What is the difference between an asset's ability to generate revenue and its ability to generate profit

Answer 1

Answer and Explanation:

As we know that the revenue is the recording of an incoem that arise from the business activity

While on the other hand, the profit is the amount that comes when the revenue is more than its cost or expenses

In the case when an asset is able to generate revenue

1. Revenue can be in terms of cash

2. It is determined

In the case when an asset is able to generate profit

1. It does not produced the cash in a direct manner

2. It is variable as proft cannot be hold