Gross margin is equal to

Question

Quizplus · Accepted Answer

Gross margin is the amount of money that a company has left over after subtracting the cost of goods sold (COGS) from its revenue. Therefore, the correct formula for gross margin is sales revenue minus COGS. Option A is incorrect because it uses the balance of merchandise inventory at the end of the period, which doesn't factor in any inventory that was sold during the period. Option B is incorrect because it only calculates the value of inventory, not the gross margin. Option D is incorrect because it uses the cost of goods available for sale, which includes inventory that may not have been sold yet.

Gross Margin Is Equal to