Accounting for IGCSE & O level - Final Statements (Section 14 - No. 38)
What is the main purpose of the 'Gross Profit' line item in the income statement?
To show the expenses related to the sale of goods.
To show the total revenue generated by the company.
To show the profit before any operating expenses are deducted.
To measure the total inventory sold during the period.
Forklaring
Gross profit measures profitability before the operating expenses are included.