Question

Objective Type Questions :
State whether following statements are true or false :

Gross profit depends upon net sales.

Answer 1

True

Explanation: Gross profit is ascertained by preparing a Trading Account. In this account, all the direct costs incurred are deducted from the net sales (sales less sales return), i.e. revenue, to arrive at gross profit. Hence, it is correct to say that gross profit depends on net sales.