Question

_______ is the difference between the selling price and the cost price of the goods sold.

• A. Gross profit
• B. Gross loss
• C. (A) or (B)
• D. (A) and (B)

Answer 1

The correct option is C (A) or (B)

Trading Account is prepared to know the Gross Profit or Gross Loss during the accounting period. The account is based on matching the selling price of goods and services with the cost of goods sold or services rendered. If cost is greater than selling price then it is gross loss. If selling price is more than cost of goods sold than it is gross profit.