Selling and administrative expenses are subtracted from cost of goods sold to obtain gross profit.

Name: Selling and administrative expenses are subtracted from cost of goods sold to obtain gross profit.
Brand: Quizplus
Rating: 4.9 (35 reviews)

Question

Quizplus · Accepted Answer

Gross profit is calculated by subtracting the cost of goods sold from net sales, not by subtracting selling and administrative expenses from cost of goods sold. Selling and administrative expenses are subtracted from gross profit to determine operating profit.

Selling and Administrative Expenses Are Subtracted from Cost of Goods