Gross Profit equals:
A) Net sales - Net Purchases.
B) Sales - Sales Returns and Allowances - Sales Discounts - Cost of Goods Sold.
C) Cost of Goods Sold - Other Expenses.
D) Cost of Goods Sold - Operating Expenses.

Question

Quizplus · Accepted Answer

Gross Profit is calculated by subtracting the Cost of Goods Sold (COGS) from the Net Sales (Sales - Sales Returns and Allowances - Sales Discounts). It does not account for other expenses or operating expenses, which are subtracted later to calculate net profit.

Gross Profit Equals