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Question

What is the difference between gross profit and net profit in accounting?

A Gross Profit = Revenue – Cost of Goods Sold; Net Profit = Revenue – Expenses Correct Answer Incorrect Answer
B Gross Profit = Revenue + Cost of Goods Sold; Net Profit = Revenue – Expenses Correct Answer Incorrect Answer
C Gross Profit = Revenue – Expenses; Net Profit = Revenue + Cost of Goods Sold Correct Answer Incorrect Answer
D Gross Profit = Revenue – Cost of Goods Sold; Net Profit = Revenue + Expenses Correct Answer Incorrect Answer

Solution

Gross Profit and Net Profit are both important indicators of a company’s financial health. While both of these measures represent the profitability of a business, they are calculated using different formulas and provide different insights into a company’s financial performance.

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