What term describes revenue minus cost of goods sold?

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Multiple Choice

What term describes revenue minus cost of goods sold?

Explanation:
Revenue minus the cost of goods sold equals gross profit. The revenue figure represents money earned from selling goods or services, while cost of goods sold covers the direct costs tied to those goods. What remains after subtracting COGS is the gross profit, showing profit from core selling activities before overhead and other expenses. This is different from gross margin, which is the gross profit expressed as a percentage of revenue. It’s also distinct from operating income (gross profit minus operating expenses) and net income (the bottom line after taxes and other non-operating items). For example, if revenue is 500 and COGS is 300, gross profit is 200; gross margin would be 200/500 = 40%.

Revenue minus the cost of goods sold equals gross profit. The revenue figure represents money earned from selling goods or services, while cost of goods sold covers the direct costs tied to those goods. What remains after subtracting COGS is the gross profit, showing profit from core selling activities before overhead and other expenses. This is different from gross margin, which is the gross profit expressed as a percentage of revenue. It’s also distinct from operating income (gross profit minus operating expenses) and net income (the bottom line after taxes and other non-operating items). For example, if revenue is 500 and COGS is 300, gross profit is 200; gross margin would be 200/500 = 40%.

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