Question on: JAMB Commerce - 2014
The net profit is the excess of gross profit and sources of income over all the expenses . This implies that net profit is
A
the difference between gross profit and trade expenses
B
the different between gross profit and net sales
C
sales less cost of sales including sales returns
D
opening stock add purchases less closing stock
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Correct Option: A
The question describes the calculation of net profit.
* **Net Profit** is derived by subtracting all business expenses from the sum of gross profit and other sources of income.
* Option A correctly states that the difference between gross profit and trade expenses determines net profit. Trade expenses are a category of expenses that are subtracted from gross profit to arrive at the net profit.
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