DECA Sports and Entertainment Marketing Practice Exam

Which term accurately describes the income from sales prior to any deductions?

1. Net income

2. Gross revenue

3. Operating income

4. Return on investment

The correct answer is: Gross revenue

The term that accurately describes the income from sales before any deductions is gross revenue. Gross revenue refers to the total amount of money generated from sales of goods or services, without taking into account any expenses, taxes, or costs associated with producing or selling those goods or services. It provides a clear picture of the total sales volume and is a crucial metric for businesses to gauge their market performance and growth potential. In contrast, net income is derived from gross revenue after all expenses, taxes, and costs have been subtracted; thus, it reflects the profitability of a company. Operating income takes gross revenue and deducts only the operating expenses, which still does not give a full picture as it excludes other costs that might affect the bottom line. Return on investment is a ratio used to evaluate the efficiency of an investment but does not represent sales revenue directly. Therefore, gross revenue is the correct term for income from sales prior to any deductions.