JAMB Commerce 2014 Question 30

Question 30

Business Calculations

The net profit is the excess of gross profit and sources of income over all the expenses. This implies that net profit is

  1. A.the difference between gross profit and gross trade expenses.
  2. B.the difference between gross profit and net sales.
  3. C.sales less cost of sales including sales returns.
  4. D.opening stock add purchases less closing stock.
Show the answer and explanation

Answer: A (the difference between gross profit and gross trade expenses.)

Explanation

Net profit is what remains of gross profit after all trading expenses are taken off.