Which of the following statements regarding gross profit (margin)is true?

Question

Quizplus · Accepted Answer

Gross margin is the amount of revenue that exceeds the cost of goods sold. It is calculated by subtracting the cost of goods sold from net sales. Therefore, A - "Gross margin is net sales minus cost of goods sold" - is the correct statement. B is false because net income would be $6,800, not $3,200. C is false because gross profit is not recorded in a separate account, but is included in the income statement. D is false because the gross profit percentage would be 50%, not 100%.

Which of the Following Statements Regarding Gross Profit (Margin)is True