Gross profit for a merchandising company equals the difference between net sales and
A)operating expenses.
B)cost of goods sold.
C)profit.
D)cost of goods sold plus operating expenses.

Question

Quizplus · Accepted Answer

Gross profit is calculated by subtracting the cost of goods sold (COGS) from net sales. This is because COGS represents the direct costs associated with producing or purchasing the products that are being sold, while net sales represents the total revenue generated from selling those products. Subtracting COGS from net sales gives us the gross profit, which is the amount of money that the company has earned before deducting operating expenses and other costs.

Gross Profit for a Merchandising Company Equals the Difference Between