Contractor License Practice Exam

Which status refers to the profits calculated after completion of a project?

1. Gross profit

2. Net profit

3. Operating profit

4. Accounted profit

The correct answer is: Net profit

Net profit is the term that refers to the profits calculated after the completion of a project. It represents the amount of money that remains after all expenses have been deducted from total revenues. This includes costs such as materials, labor, overhead, and any other operational expenses that may have been incurred during the project. Net profit is crucial for assessing the overall profitability of a project. In contrast, gross profit refers solely to the revenue minus the cost of goods sold (COGS), without considering other operating expenses. Operating profit takes this a step further by accounting for operating expenses, but it is still not as comprehensive as net profit because it does not factor in non-operating factors like taxes and interest. The term "accounted profit" is not a standard term in accounting, making it less relevant for this context. Thus, net profit is the correct choice as it encapsulates all aspects of profit calculation after project completion.