Which of the Following Statements About Gross Profit Is Not

question 34

Multiple Choice

Which of the following statements about gross profit is not true?

• A)Gross profit is equal to sales less cost of sales
• B)An entity cannot be sustainable unless the gross profit is positive
• C)Gross profit is applicable to manufacturing and retail businesses
• D)Gross profit is equal to total income minus total expenses

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Definitions:

Limited Liability Company

A business structure that combines the pass-through taxation of a partnership or sole proprietorship with the limited liability of a corporation.

Tax Treatment

The specific methodology applied to determine the amount of taxes owed by an individual or business.

Limited Liability

A legal structure where a company's owners are not personally liable for the company's debts or liabilities.

Partnership

A sanctioned form of business collaboration among two or more persons who equally participate in managing the business and dividing its profits.