Given Net Sales 60,000 and Cost of Goods Sold 38,000, what is Gross Profit?

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Study for the AAT Level 2 Introduction to Bookkeeping Test. Use flashcards and multiple choice questions with hints and explanations. Prepare effectively for your exam!

Multiple Choice

Given Net Sales 60,000 and Cost of Goods Sold 38,000, what is Gross Profit?

Explanation:
Gross profit shows how much is left from selling goods after paying for the goods themselves. It’s Net Sales minus Cost of Goods Sold. Here, Net Sales are 60,000 and COGS is 38,000, so 60,000 − 38,000 = 22,000. That 22,000 is the gross profit, the amount available to cover other operating costs. The other numbers would come from not subtracting COGS (60,000) or from misreading the figures (38,000 or 98,000). The key idea is subtracting the cost of goods sold from sales to reveal gross profit.

Gross profit shows how much is left from selling goods after paying for the goods themselves. It’s Net Sales minus Cost of Goods Sold. Here, Net Sales are 60,000 and COGS is 38,000, so 60,000 − 38,000 = 22,000. That 22,000 is the gross profit, the amount available to cover other operating costs. The other numbers would come from not subtracting COGS (60,000) or from misreading the figures (38,000 or 98,000). The key idea is subtracting the cost of goods sold from sales to reveal gross profit.

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