Which of the following is the computation for gross earnings?
A)Gross Earnings = Revenue - After-Tax Cost of Financial Capital Used
B)Gross Earnings = Net Income ÷ Sales
C)Gross Earnings = (Net Sales - Cost of Production)× Tax Rate
D)Gross Earnings = Net Sales - Cost of Production

Question

Quizplus · Accepted Answer

Gross earnings is the total revenue earned by a company before deducting any expenses or taxes. Therefore, the computation for gross earnings is the total revenue or net sales minus the cost of production. Option D correctly reflects this calculation. Option A calculates the net income after deducting the cost of financial capital, Option B calculates gross profit margin, and Option C calculates the amount of taxes to be paid after deducting the cost of production from net sales.

Which of the Following Is the Computation for Gross Earnings