Question

Merchandisers buy products and resell them. Examples of merchandisers include Walmart and Home Depot. A merchandiser’s costs on the income statement include the cost of goods sold. Gross profit, or gross margin, equals sales minus cost of goods sold. True or false?

Answer 1

True

Step-by-step explanation:

The formula to compute the gross profit or gross margin is shown below:

As we know that

The gross profit equals to

Gross profit = Sales revenue - cost of goods sold

And, the cost of goods sold equals yo

Cost of goods sold = Opening stock + purchase - closing stock

So after deducting the cost of goods sold from the sales revenue we can get the gross profit or gross margin

Hence, the given statement is true