The relationship between revenue from selling inventory and the cost of that inventory is measured as:
A) Net income.
B) Gross profit.
C) Income before taxes.
D) Operating income.

Question

Quizplus · Accepted Answer

Gross profit is the difference between revenue earned from selling inventory and the cost of that inventory. It represents the amount of money left over after deducting the cost of goods sold from total revenue. Therefore, the relationship between revenue and cost of inventory is measured as gross profit.

The Relationship Between Revenue from Selling Inventory and the Cost