Question

Net Purchases + Purchases Returns and Allowances + Purchase Discounts equals:

O A. Gross Profit.
OB. Gross Purchases.
O C. Net Income.
OD. Net Loss.

Answer 1

OB. Gross Purchases.

Step-by-step explanation:

Gross purchases represent all the purchases a business made in a particular period. It includes returns outwards ( purchases returns), discounts and allowances received.

Net purchases are calculated by subtracting purchase returns, discounts received, and allowances from gross purchases.

Therefore, Net Purchases + Purchases Returns and Allowances + Purchase Discounts= gross purchases.