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

Question

Quizplus · Accepted Answer

Cost of goods sold represents the cost of the products sold during the accounting period and is subtracted from net sales revenue to arrive at gross profit. This calculation shows the profitability of the company's product sales before accounting for other expenses such as operating expenses. Cost of goods available for sale represents the total cost of products available to sell during the accounting period, including beginning inventory and purchases. Sales discounts and returns and allowances are deducted from gross sales revenue to arrive at net sales revenue. Operating expenses are separate from cost of goods sold and are deducted from gross profit to arrive at net income.

Which of the Following Is Subtracted from Net Sales Revenue