Operating Income Is Sales Revenue Minus Operating Expenses True False

Derived from gross profit operating profit reflects the.

Operating income is sales revenue minus operating expenses true false. Sales revenue minus operating expenses equals gross profit. Operating expenses net income. Merchandise inventory cost of goods sold. Mathematically it is represented either as.

Under the periodic inventory system the cost of merchandise sold is equal to the beginning merchandise inventory plus the cost of merchandise purchased plus the ending merchandise inventory 3. What is the amount of the firm s net income. Verify the accuracy of the accounting records. Operating expenses of 8 750 000.

Net sales is gross sales minus sales discounts and sales returns and allowances. 5 true or false. Gross profit is the total revenue minus the expenses directly related to the production of goods for sale called the cost of goods sold. Multiple step shows operating revenues and expenses separate from the non operating revenues and expenses.

Sales discounts from sales revenue. A physical count of inventory is taken at the end of an accounting period under a periodic system in order to. Operating expenses include interest expense and income tax expense. Cost of goods sold of 35 025 000.

Cost of goods sold net sales revenue. And interest expense of 750 000. Operating income of manufacturers will always be the same regardless of whether variable or absorption costing is used. In a merchandise business sales minus operating expenses equals net income 2.

7 your firm has the following income statement items. Sales revenue less cost of goods sold less operating expenses equals net income. Under absorption costing the fluctuation of inventory levels will impact operating income regardless of sales revenue. Sales revenue less cost of goods sold equals net profit.

The contribution margin is equal to sales revenue minus variable expenses. Operating profit margin operating profit revenue x 100 net profit margin net income revenue x 100 as you can see in the above example the difference between gross vs net gross vs net gross means the total or whole amount of something whereas net means what remains from the whole after certain deductions are made. Gross profit minus operating expenses. Learn vocabulary terms and more with flashcards games and other study tools.

Gross profit is equivalent to net sales minus cogs. Utale whether the statement is true 1 or false 1. It is computed by deducting opex such as salaries depreciation and cogs from net sales or revenue. Income tax of 1 744 000.