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What Is Gross Profit? - Definition, Formula & Calculation

Instructions:

Choose an answer and hit 'next'. You will receive your score and answers at the end.

question 1 of 3

Which of the following are part of the formula for calculating gross profit?

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1. If net sales are $10,000 and cost of goods sold is $6,000, what is the gross profit?

2.

You are given the following information:

Sales = $7,000

Sales Returns and Allowances= $800

Discounts= $200

What are the net sales?

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About This Quiz & Worksheet

Calculating gross profit is an important skill in business, and this quiz/worksheet will help you test your understanding of its formula and application.

Quiz & Worksheet Goals

In these assessments you'll be tested on the calculation and components of:

  • Gross profit
  • Cost of Goods
  • Net sales

Skills Practiced

This quiz and worksheet allow students to test the following skills:

  • Problem solving - use acquired knowledge to solve practice problems involving the calculation of gross profit
  • Information recall - access the knowledge you've gained regarding the formula for calculating gross profit
  • Knowledge application - use your knowledge to answer questions about net sales and cost of goods

Additional Learning

To learn more about gross profit, review the accompanying lesson, What is Gross Profit? - Definition, Formula, Calculation. This lesson covers the following objectives:

  • Define gross profit
  • Know the formula for calculating gross profit
  • Familiarize yourself with the components of gross profit
  • Understand the roles of cost of goods and net sales in gross profit
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