Paresh's investors informed him that his $1 million in sales minus sales returns, allowances, and cost of goods sold of $900,000, left only $100,000 in

Question

Quizplus · Accepted Answer

Gross profit is calculated by subtracting the cost of goods sold from net sales (sales minus sales returns, allowances, and discounts). In this case, $1 million in sales minus the cost of goods sold ($900,000) leaves $100,000, which is the gross profit.

Paresh's Investors Informed Him That His $1 Million in Sales