Which of the following is not a component of the gross profit calculation?
A)Cost of sales.
B)Sales returns and allowances.
C)Allowance for doubtful accounts.
D)Credit card discounts.

Question

Quizplus · Accepted Answer

Allowance for doubtful accounts is a contra-asset account that is used to reflect an estimate of the amount of accounts receivable that may not be collected. It is not a component of the gross profit calculation. The other options (cost of sales, sales returns and allowances, credit card discounts) are all components that are subtracted from sales revenue to calculate gross profit.

Which of the Following Is Not a Component of the Gross