Which of the following statements about gross profit is not true?
A)Gross profit is equal to sales less cost of sales
B)An entity cannot be sustainable unless the gross profit is positive
C)Gross profit is applicable to manufacturing and retail businesses
D)Gross profit is equal to total income minus total expenses

Question

Quizplus · Accepted Answer

Gross profit is not equal to total income minus total expenses. Total income minus total expenses would give the entity's net profit or net loss. Gross profit only considers the revenue generated from sales and the direct costs associated with producing or acquiring that revenue.

Which of the Following Statements About Gross Profit Is Not