Which of the following best defines NOR and AOR?

• A. NOR is total revenue minus total expenses in a given year; AOR is accumulated NOR over several years
• B. NOR is net operating revenue; AOR is annual operating reserve
• C. NOR is net ordinary revenue; AOR is accumulated reserves
• D. NOR is total assets minus total liabilities; AOR is accumulated equity

Answer: (A)

The main idea is distinguishing a yearly profitability measure from its cumulative buildup over time. NOR represents the bottom-line for a single year: subtract all expenses from total revenue for that year. This shows how the organization performed financially in that year after accounting for costs. AOR then takes that yearly result and sums it across multiple years, capturing the total net operating performance accumulated over the period.

This definition matches the option that states NOR equals total revenue minus total expenses in a given year and that AOR equals accumulated NOR over several years. The other definitions mix in concepts that don’t align with this interpretation—developing a sense of operating revenue alone, or treating AOR as a reserve, or equating NOR with assets minus liabilities—none reflect the yearly net result and its accumulation over time.