Which of the following statements is false?
A)Gross profit percentage is calculated as gross profit divided by net sales.
B)Gross profit should only be viewed for each reporting company and is not useful in comparing different companies in the same industry.
C)Gross profit is calculated as net sales less cost of sales.
D)A higher gross profit might be strategic in order to afford high research and development costs.

Question

Quizplus · Accepted Answer

Gross profit can be useful in comparing companies in the same industry, as it gives an indication of how efficiently a company is producing and selling its products. However, it should be noted that differences in accounting methods and business models can affect gross profit percentage, so it should not be the only factor considered when comparing companies.

Which of the Following Statements Is False