Explain the difference between gross profit and net profit
Home

Explain the difference between gross profit and net profit

Gross Profit is calculated by deducting the cost of goods sold from the net sales figure. The calculation of the gross profit takes place in the trading account. Net Profit – the excess of gross profit over expenditure. it is calculated in the profit and loss account by deducting all business expenditures from the gross…

Gross Profit is calculated by deducting the cost of goods sold from the net sales figure. The calculation of the gross profit takes place in the trading account.

Net Profit – the excess of gross profit over expenditure. it is calculated in the profit and loss account by deducting all business expenditures from the gross profit.