The gain from sale of capital assets is added to revenue to ascertain the _________________.

Gross Profit of a business

No worries! We‘ve got your back. Try BYJU‘S free classes today!

Operating Profit of business

No worries! We‘ve got your back. Try BYJU‘S free classes today!

net profit of a business

Right on! Give the BNAT exam to get a 100% scholarship for BYJUS courses

All of above

No worries! We‘ve got your back. Try BYJU‘S free classes today!

Open in App

Solution

The correct option is C net profit of a business
A gain from sale of a capital asset is a non operating income and hence, it will not be taken into account to calculate gross profit and operating profit.
It is a non-operating income and hence, it would be taken into account to calculate net profit.
Net profit accounts for all the expenses and incomes.

Suggest Corrections

Similar questions

Q. The gain from sale of capital assets need not be added to revenue to ascertain the ________________.

State whether the following statement are true or false.

1. Final Accounts are prepared on the basis of Trial Balance.
2. Trading Account is a part of Profit & Loss Account.
3. Profit Loss Account is prepared to find out Gross Profit or Gross Loss.
4. Gross Profit or Gross Loss is transferred to Balance Sheet.
5. An amount of net profit is added to the capital.
6. All indirect expenses are debited to trading account.
7. Balance Sheet is a statement and not an account.
8. Capital account is a personal account.
9. Amount of prepaid expenses appears on assets side.
10. Bank Overdraft is a liability of business concern.

Q. Profit on sale of Asset is __________ to Profit and loss A/c.

Q. A firm has Capital of 10,60,000; Sales of 5,00,000; Gross Profit of 2,00,000 and Expenses of 1,00,000. What is the Net Profit Ratio?

Q. Revenue from Operations, i.e., Net Sales ₹ 8,20,000; Return ₹ 10,000; Cost of Revenue from Operations (Cost of Goods Sold) ₹ 5,20,000; Operating Expenses ₹ 2,09,000; Interest on Debentures ₹ 40,500; Gain (Profit) on Sale of a Fixed Asset ₹ 81,000. Calculate Net Profit Ratio.

Join BYJU'S Learning Program