Gross Profit Equals

question 24

Multiple Choice

Gross Profit equals:

• A) Net sales - Net Purchases.
• B) Sales - Sales Returns and Allowances - Sales Discounts - Cost of Goods Sold.
• C) Cost of Goods Sold - Other Expenses.
• D) Cost of Goods Sold - Operating Expenses.

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Definitions:

Economic Costs

The total cost of choosing one action over another, consisting of both explicit costs (direct monetary outlays) and implicit costs (the value of opportunities foregone).

Accounting Degree

An academic degree that prepares students for careers in accounting, focusing on areas like auditing, tax, financial reporting, and management accounting.

Economic Profits

Profits calculated by subtracting both explicit and implicit costs from total revenue.

Explicit Costs

Direct, out-of-pocket payments for wages, rent, materials, and other inputs necessary for a business to operate.