A business reports sales of Rs. 900,000, sales returns of Rs. 50,000 and cost of goods sold of Rs. 500,000. What is its gross profit?
Correct answer: A. Rs. 350,000
- A. Rs. 350,000
- B. Rs. 400,000
- C. Rs. 450,000
- D. Rs. 550,000
Explanation
Net sales are Rs. 850,000 after deducting sales returns. Gross profit is net sales less cost of goods sold, so Rs. 850,000 - Rs. 500,000 equals Rs. 350,000.
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Financial statements present a business's financial performance and position through the income statement, statement of financial position, cash flow statement and changes in equity. Questions involve preparing and interpreting these statements, adjusting entries, depreciation, closing inventory, accrued and prepaid items, and distinguishing profit from cash flow.
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