Which of the Following Is Not a Component of the Gross

question 53

Multiple Choice

Which of the following is not a component of the gross profit calculation?

• A)Cost of sales.
• B)Sales returns and allowances.
• C)Allowance for doubtful accounts.
• D)Credit card discounts.

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Definitions:

Earnings Before Taxes

A measure of a company’s financial performance that calculates profits before taxes are deducted.

Sales Price

The financial value assigned to a product or service available for purchase in the market.

Variable Costs

Costs that vary directly with the level of production or sales volume, such as raw materials and direct labor expenses.

Variable Cost

Expenses incurred by a business that vary directly with the level of production or sales volume, such as cost of goods sold.