Gross Profit for a Manufacturing Business Is Computed by Deducting

question 70

True/False

Gross profit for a manufacturing business is computed by deducting cost of goods manufactured from net sales.

---

Definitions:

Account Receivable

A claim against the customer created by selling merchandise or services on credit.

Reinstated

Restoring something to its previous state or position, often used in the context of employment, insurance, or legal status.

Direct Write-off

A method for recognizing bad debts, where uncollectible accounts receivable are directly written off against income at the time they are deemed noncollectible.

Allowance for Doubtful Accounts

A financial accounting provision estimating the portion of accounts receivable that may not be collectible.