Question

Gross profit will always be _____ net income.
a.
equal to
b.
less than
c.
greater than
d.
unrelated to


Please select the best answer from the choices provided

A
B
C
D

Answer 1

C

Gross profit (sales minus cost of goods sold) is calculated before operating expenses, interest, and taxes are deducted, so net income (after those deductions) will be less than (or at best equal to) gross profit.