Which of the Following Defines Gross Profit

question 126

Multiple Choice

Which of the following defines Gross profit?

• A)Net sales revenue less Sales discounts
• B)Net sales revenue less Cost of sales
• C)Sales revenue less Overhead expenses
• D)Sales revenue less Sales discounts and allowances

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Definitions:

Indirect Method

A approach used in cash flow statements to adjust net income for the effects of non-cash transactions and changes in working capital.

Operating Activities

Operating activities involve the primary revenue-generating activities of an organization, including production, sales, and delivery of the company’s product as well as administrative and general expenses.

Salaries Expense

The cost incurred by a business to pay its employees for services rendered during a specific period.

Unearned Revenues

Money received by a company for goods or services yet to be delivered or performed, recorded as a liability.