NBC Company Had $32,000 in Net Sales, $15,000 in Cost

question 105

Multiple Choice

NBC Company had $32,000 in net sales, $15,000 in cost of merchandise sold, $18,000 in operating expenses, and $2,000 in other income. What is NBC Company's gross profit?

• A) $17,000
• B) $3,000
• C) $1,000
• D) $(1,000)

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Definitions:

AASB 137

The Australian Accounting Standards Board standard that deals with Provisions, Contingent Liabilities, and Contingent Assets.

Provisions

Liabilities of uncertain timing or amount, recorded to account for future obligations or potential losses.

Contingent Liabilities

Possible obligations that arise from past events and whose existence will be confirmed only by the occurrence or non-occurrence of one or more uncertain future events not wholly within the control of the entity.

Contingent Assets

Possible assets that arise from past events and whose existence will be confirmed only by the occurrence or non-occurrence of certain future events not wholly within the control of the company.