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Calculation of Gross Profit

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1. Which of the following accounts is not included in the calculation for Gross Profit?

a) Revenue
b) Cost of goods sold
c) Net sales
d) General and selling expenses

2. An item that cost $90 is sold for $120. The gross profit ratio for this item is;

a) 20%
b) 25%
c) 33.3%
d) 60%

Thanks.

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Solution Summary

This solution explains which account is not included in the calculation for gross profit. This solution also calculates the gross profit ratio on an item that costs $90 and is sold for $120.

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For question one:

d) General and selling expenses

Gross profit is ...

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