JAMB - Accounts Principles Of Accounts (2018 - No. 83)

  N
sales 20,000
cost of sales 10,000
operating expenses 2,500
expenses prepaid included in operating expenses 500

use the information above to answer the following question. 

  N
sales 20,000
cost of sales 10,000
operating expenses 2,500
expenses prepaid included in operating expenses 500

use the information above to answer the following question. 

  N
sales 20,000
cost of sales 10,000
operating expenses 2,500
expenses prepaid included in operating expenses 500

use the information above to answer the following question. 

calculate the net profit. 
N12,500
N10,000
N8,000
N7,500

Explanation

Net profit, also referred to as the bottom line, net income, or net earnings is a measure of the profitability of a venture after accounting for all costs and taxes. It is the actual profit, and includes the operating expenses that are excluded from gross profit. it represents the number of sales remaining after all operating expenses, interest, taxes and preferred stock dividends (but not common stock dividends) have been deducted from a company's total revenue. 

net profit = gross profit - expenses

10,000 - 2500 = 7,500

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