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WAEC Financial Accounting 2000 Question 19

Question 19

Final Accounts of a Sole Trader

Gross Profit of a business is the

  1. A.excess of sales over all the trading expenses
  2. B.difference between sales and purchases
  3. C.excess of sales over the cost of goods sold
  4. D.difference between discounts received and discounts allowed
Show the answer and explanation

Answer: C (excess of sales over the cost of goods sold)

Explanation

Gross profit = net sales − cost of goods sold.