Gross Profit Is the Difference Between

question 105

Multiple Choice

Gross profit is the difference between:

• A)Net sales and the cost of goods sold.
• B)The cost of merchandise purchased and the cost of merchandise sold.
• C)Net sales and net income.
• D)Net sales and all expenses.

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Definitions:

Subsidiary Companies

These are companies that are controlled by another company, known as the parent company, through ownership of more than half of their voting stock.

Stock Investments Account

An account that records the cost of stocks that have been purchased as investments by a company.

Dividends Received

Income received from shares in a company, typically distributed from profits to shareholders as decided by the board of directors.

Short-Term Investment

Assets that are expected to be converted into cash, sold, or consumed within one year or within the business's operating cycle.