Question

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

• A. Gross profit of a business.
• B. Net profit of a business.
• C. Operating profit of a business.
• D. All of above.

Answer 1

Answer: (D)

All of above.

The gain from sale of capital assets will need to be added to revenue to calculate the non - operating profit, and not gross profit, net profit and operating profit.

Gross profit is calculated to ascertain the profit from sale and purchase of goods/services, operating profit accounts only operating incomes and expenses and net profit is gross profit less operating expenses.