The major difference between gross and net profit is that net profit _____.

Question

Quizplus · Accepted Answer

Gross profit is the total revenue minus cost of goods sold, while net profit is the revenue minus cost of goods sold and all other operating expenses such as rent, salaries, and advertising. Therefore, net profit deducts retail operating expenses that are not included in the calculation of gross profit. Transportation charges are considered a part of the cost of goods sold and are already accounted for in the calculation of gross profit. The method of inventory valuation (LIFO or FIFO) does not affect the calculation of gross or net profit.

The Major Difference Between Gross and Net Profit Is That