Which of the Following Is Subtracted from Net Sales Revenue

question 48

Multiple Choice

Which of the following is subtracted from net sales revenue to arrive at gross profit on a multi-step income statement?

• A)cost of goods available for sale
• B)cost of goods sold
• C)sales discounts and Sales returns and allowances
• D)operating expenses

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Definitions:

Law Of Diminishing Returns

The principle that as successive increments of a variable resource are added to a fixed resource, the marginal product of the variable resource will eventually decrease.

Resource Inputs

The basic materials and components required in the production process to create goods or services.

Product Outputs

Product outputs refer to the goods or services produced as a result of manufacturing processes or business activities.

Total Costs

The total expense of production, encompassing both non-changing and changing costs.