'Gross profit' is calculated as
A)Total sales - Cost of sales.
B)Total sales - Cost of sales - Selling, general, and administrative expenses - Depreciation and amortisation.
C)Total sales - Cost of sales - Selling, general, and administrative expenses.
D)none of the above

Question

Quizplus · Accepted Answer

Gross profit is the profit earned after deducting the cost of goods sold from the revenue earned. Therefore, Gross Profit is calculated as Total Sales – Cost of Sales. Option A correctly calculates the gross profit. Option B and C both deduct additional expenses such as Selling, general and administrative expenses, and Depreciation and Amortization, which are not included in gross profit calculation.

'Gross Profit' Is Calculated as