Gross profit represents profit after the deduction of cost of goods sold, and before the deduction of all other selling expenses, general expenses, and tax expense.

Question

Quizplus · Accepted Answer

Gross profit is calculated as revenue minus cost of goods sold. Expenses such as selling expenses, general expenses, and tax expense are not deducted from gross profit to arrive at net profit.

Gross Profit Represents Profit After the Deduction of Cost of Goods