Asked by Jared Bernardi on Jun 03, 2024
Verified
Which of the following expressions is incorrect?
A) Gross profit - operating expenses = net income
B) Sales revenue - cost of goods sold - operating expenses = net income
C) Net income + operating expenses = gross profit
D) Operating expenses - cost of goods sold = gross profit
Gross Profit
The amount by which sales revenue exceeds the cost of goods sold, prior to subtracting expenses such as overheads, payroll taxes, and interest.
Operating Expenses
Costs related to the day-to-day operations of a business, excluding the cost of goods sold.
Net Income
Profit calculated after deducting all operating expenses, interest, taxes, and any other charges from total revenues.
- Comprehend the theory and technique for determining net income.
Verified Answer
KS
Kriti SinghJun 09, 2024
Final Answer :
D
Explanation :
Operating expenses minus cost of goods sold cannot equal gross profit, as gross profit is calculated as sales revenue minus cost of goods sold.
Learning Objectives
- Comprehend the theory and technique for determining net income.