Define gross profit. How is net profit different from the gross profit

1.	Define gross profit. How is net profit different from the gross profit?
Answer» Gross Profit: Gross profit is calculated as sales minus all costs directly related to those sales. These costs can include manufacturing expenses, raw materials, labour, selling, marketing and other expenses. Net Profit: Net Profit is the amount of money earned after all expenses, including overhead, employee salaries, manufacturing costs, and advertising costs, have been deducted from the total revenue. Gross Profit is showed in the debit side in the Trading Account. Net Profit is showed in the debit side in the Profit and Loss Account.

Define gross profit. How is net profit different from the gross profit?

Answer»

Gross Profit: Gross profit is calculated as sales minus all costs directly related to those sales. These costs can include manufacturing expenses, raw materials, labour, selling, marketing and other expenses.

Net Profit: Net Profit is the amount of money earned after all expenses, including overhead, employee salaries, manufacturing costs, and advertising costs, have been deducted from the total revenue.

Gross Profit is showed in the debit side in the Trading Account. Net Profit is showed in the debit side in the Profit and Loss Account.

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