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State true or false with reason. Gross profit depends upon not sales. - Book Keeping and Accountancy

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MCQ
True or False

State true or false with reason.

Gross profit depends upon not sales.

Options

  • True

  • False

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Solution

False.

Explanation: 

Gross profit is ascertained by preparing a Trading Account. In this account, all the direct costs incurred are deducted from the net sales (sales less sales return), i.e. revenue, to arrive at gross profit. Hence, it is correct to say that gross profit depends on net sales.

Concept: Concept of Financial Statement Analysis
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APPEARS IN

Micheal Vaz Accounts - Book Keeping and Accountancy HSC 12th Standard Maharashtra State Board
Chapter 12 Analysis of Financial Statements
Exercise | Q 4 | Page 384
Balbharati Book-keeping and Accountancy 12th Standard HSC Maharashtra State Board
Chapter 9 Analysis of Financial Statements
Exercise 9 | Q C. 5. | Page 376

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