Which of the following is subtracted from net sales to determine gross profit?
A)Cost of goods sold
B)Expenses
C)Both cost of goods sold and expenses
D)Cost of goods sold, expenses, and taxes
E)Taxes

Question

Quizplus · Accepted Answer

Cost of goods sold is subtracted from net sales to determine gross profit.
Key Takeaway: Gross profit is Net Sales ? COGS. Operating Income is determined by taking the Gross Profit and subtracting Operating Expenses. The net amount of non-operating revenues, gains, non-operating expenses, and losses is combined with Operating Income to arrive at the Net Income (or the Net Loss).
Some common formulas:
· Net Sales ? COGS = Gross Profit
· Gross Profit ? Operating Expenses = Operating Income
· Operating Income + (Non-operating Income + Revenue + Gains) ? (Non-operating Expenses + Non-operating Losses) = Net Income or Net Loss

Which of the Following Is Subtracted from Net Sales to Determine