The gross margin is $7000 and the revenues are $16000, then the cost of goods sold would be __________?
Correct answer: D. $9,000
- A. $23,000
- B. −$23000
- C. −$9000
- D. $9,000
Explanation
Cost of goods sold equals revenue minus gross margin: $16,000 − $7,000 = $9,000. A negative amount would contradict the definition of gross margin as revenue less COGS.
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About Financial Statements
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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