In order to compute a firm's gross profit on the income statement, its cost of goods sold is subtracted from which of the following?

Question

Quizplus · Accepted Answer

Gross profit is the amount earned by a company after deducting the cost of goods sold from its revenues. Therefore, the correct option is to subtract cost of goods sold from revenue. Total assets and liabilities are not used in the calculation of gross profit.

In Order to Compute a Firm's Gross Profit on the Income