Gross profit is calculated by subtracting the cost of goods sold (COGS) from sales revenue. This calculation only takes into account the direct costs associated with producing or acquiring the goods being sold. Gross profit does not include other operating expenses such as rent, salaries, utilities, etc.

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Gross Profit Is

Question 13

Multiple Choice

Gross profit is

A) sales revenue less cost of goods sold.
B) sales revenue less sales returns and allowances.
C) sales revenue less inventory.
D) sales revenue less operating expenses.

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