The gross approach to recording revenues results in higher earnings than does the net method.

Question

Quizplus · Accepted Answer

The gross approach to recording revenues does not affect the total earnings; it impacts how revenue and costs are presented. Gross revenue reporting shows total sales and the cost of goods sold separately, while net revenue reporting shows the net amount after deducting costs directly related to the sales. The overall profit or earnings remain the same under both methods.

The Gross Approach to Recording Revenues Results in Higher Earnings