Which of the following statement is incorrect?

Carriage inwards is included in the Income Statement as part of cost of sales

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Carriage outwards is shown in the Income Statement as a deduction from gross profit

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Gross profit is the difference between purchases and sales

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Net profit is gross profit less all expenses other than those included in the cost of goods sold

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Solution

The correct option is C
Gross profit is the difference between purchases and sales

Gross Profit = Sales - COGS

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Similar questions

Calculate closing stock and cost of goods sold. Opening stock Rs. 5,000 ; sales Rs. 16,000; carriage inwards Rs. 1,000, sales return Rs. 1,000; gross profit Rs. 6,000; purchases Rs. 10,000; purchases return Rs. 900.

Q. Sales - Rs.

1, 60, 000

, Returns Inwards - Rs.

10, 000

, Gross Profit - Rs.

60, 000

and Returns outwards - Rs.

15, 000

. The cost of goods sold is:

Q. Carriage Inwards is shown in the statement of profit and loss under ___________ .

Prepare a Common-size income statement of Shefali Ltd. with the help of following information:

Particulars	2015-16 Rs.	2016-17 Rs.
Sales	6,00,000	8,00,000
Gross profit	50% of sales	45% of sales
Indirect expense	25% of gross profit	25% of gross profit
Less: Cost of goods sold	4,28,000	7,28,000
Other incomes	10,000	12,000
Income tax	30%	30%

Q. From the following particulars, ascertain the value of Opening Stock:-

	₹		₹
Purchases	60,000	Wages	3,000
Sales	1,05,000	Carriage Outwards	1,200
Closing Stock	20,000	Rate of Gross Profit on cost of goods sold	50%

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Which of the following statement is incorrect?

The correct option is C Gross profit is the difference between purchases and sales Gross Profit = Sales - COGS

The correct option is C
Gross profit is the difference between purchases and sales

Gross Profit = Sales - COGS