Texas Real Estate Brokerage Sales Apprentice Education (SAE) Practice Exam

Which of the following defines the term 'receipts' in a business context?

1. Records of all financial obligations

2. Money received by the business

3. Payments made to suppliers

4. Overall profit margins

The correct answer is: Money received by the business

In a business context, the term 'receipts' specifically refers to money received by the business. This encompasses various forms of income, including cash from sales, payments for services rendered, and other sources of revenue. Receipts are essential for financial reporting, as they help businesses track income and assess their financial performance over time. Understanding receipts is crucial for managing cash flow, as they directly reflect the money entering the business. While records of financial obligations and payments to suppliers are important aspects of accounting and financial management, they do not encapsulate the definition of receipts. Overall profit margins, while indicative of business profitability, are derived from comparing income (which would include receipts) to expenses, rather than being a definition of the term itself.