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Dusti Coker
on Oct 28, 2024

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Which of the following is not a component of the gross profit calculation?

A) Cost of sales.
B) Sales returns and allowances.
C) Allowance for doubtful accounts.
D) Credit card discounts.

Gross Profit Calculation

The process of determining a company's gross profit by subtracting the cost of goods sold from total revenue.

Allowance for Doubtful Accounts

A contra-asset account used to estimate the portion of a company's accounts receivable that may not be collectible.

Sales Returns

Transactions where customers return previously purchased merchandise, leading to a reduction in sales revenue.

  • Understand the impact of sales returns, allowances, and credit card discounts on gross profit calculation.
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Reginald LazarreOct 31, 2024
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