COST ACCOUNTING
FINANCIAL TERMINOLOGY
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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What is the formula for net profit?
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turnover-cost of sales
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gross profit-expenditure
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current assets + fixed assets
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fixed costs + variable costs
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Explanation:
Detailed explanation-1: -Net Income = Gross Profit-Operating Expenses-Other Business Expenses-Taxes-Interest on Debt + Other Income.
Detailed explanation-2: -Net profit = Revenue/Sales + Income from other sources – Cost of Goods Sold – Operating Expenses – Other Expenses – Interest – Depreciation – Taxes.
Detailed explanation-3: -Profit is revenue minus expenses. For gross profit, you subtract some expenses. For net profit, you subtract all expenses. Gross profits and operating profits are steps on the road to net profits.
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