Which of the following defines Gross profit?
A) Sales revenue less Sales discounts and allowances
B) Sales revenue less Operating expenses
C) Net sales revenue less Sales discounts
D) Net sales revenue less Cost of goods sold

Question

Quizplus · Accepted Answer

Gross profit is defined as the net sales revenue less cost of goods sold. It represents the profit earned by a business before deducting operating expenses. Therefore, option D is the correct answer. Option A is incorrect because it only subtracts sales discounts and allowances, not the cost of goods sold. Option B subtracts all operating expenses, not just the cost of goods sold. Option C only subtracts sales discounts, not the cost of goods sold.

Which of the Following Defines Gross Profit