A question asked by stockholders is, "How much gross profit did the company make?" What financial statement would have the "gross profit" indicated as a separate line item?

Question

Quizplus · Accepted Answer

Gross profit is indicated as a separate line item on the multi-step income statement, which calculates gross profit by subtracting the cost of goods sold from net sales. The balance sheet represents the company's financial position, and retained earnings is a section under stockholders' equity that includes net income or loss, not gross profit. The statement of cash flows shows how cash flows in and out of the company, but does not include gross profit as a separate line item. The single-step income statement only calculates total revenue and subtracts total expenses to determine net income or loss, without separating out gross profit.

A Question Asked by Stockholders Is, "How Much Gross Profit