The Following Statements Regarding Gross Profit Are True Except

question 32

Multiple Choice

The following statements regarding gross profit are true except:

• A) Gross profit less other operating expenses equals income from operations.
• B) Gross profit is not calculated on the multiple-step income statement.
• C) Gross profit equals net sales less cost of goods sold.
• D) Gross profit is also called gross margin.
• E) Gross profit must cover all operating expenses to yield a return for the owner of the business.

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Definitions:

Marketability

The ease with which an asset or service can be sold or bought in the market, often because of demand, availability, or regulatory conditions.

Instrument

An instrument is a formal legal document, such as a contract, will, or security, that gives evidence or details of a transaction or legal act.

Negotiable Instrument

A written document guaranteeing the payment of a specific amount of money to the bearer on demand or at a set time.

Substitute

An alternative option or something that replaces another.