Which of the following is subtracted from Gross profit to arrive at Net profit?
A)Cost of goods available for sale
B)Operating expenses
C)Cost of sales
D)Sales discounts and Sales returns and allowances

Question

Quizplus · Accepted Answer

Gross profit is calculated by subtracting cost of goods sold from net sales. To arrive at net profit, operating expenses such as salaries, utilities, rent, etc. are subtracted from gross profit. Cost of goods available for sale and cost of sales are other terms for cost of goods sold and are already accounted for in the gross profit calculation. Sales discounts and sales returns and allowances are deductions to net sales, not directly related to arriving at net profit.

Which of the Following Is Subtracted from Gross Profit to Arrive