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1.
Which of the following expenses is subtracted from sales when calculating operating profit?
SGA. Operating profit is sometimes called EBIT, or earnings before interest and taxes. Cost of goods sold and SGA are two of the main expenses subtracted from revenue in calculating operating profit.
2.
A company's sales, minus its cost of sales, is known as _______.
Gross profit. Gross profit is defined as sales (or revenue) minus cost of sales.
3.
The expenses directly incurred in creating the goods or services that a company sells are called _______.
All of the above. These are all different terms used for these expenses.
4.
Under accrual accounting, a company records an expense when _______.
The company has incurred it. A company records an expense when it is incurred. Under accrual accounting, expenses are not necessarily incurred when cash is spent.
5.
A company's revenue may also be called by what other word?
Sales. For accounting purposes, it usually is called revenue.
