Gross profit is the amount remaining after subtracting the cost of goods sold (COGS) from net sales. COGS is the direct cost of producing or acquiring the goods sold by a company, and does not include indirect expenses like rent, utilities, or overhead. Therefore, gross profit is calculated as net sales minus COGS.

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Gross Profit Equals

Question 180

Multiple Choice

Gross profit equals:

A) Net sales minus cost of goods sold
B) Revenues minus expenses
C) Beginning inventory plus purchases minus ending inventory
D) Revenues minus inventory

Correct Answer: