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A company's sales, minus its cost of sales, is known as _______.

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Revenue

Gross profit

Net income

Gross profit. Gross profit is defined as sales (or revenue) minus cost of sales.

Under accrual accounting, a company records an expense when _______.

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The company delivers cash payment to a supplier

The supplier receives cash payment from a company

The company has incurred it

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.

The expenses directly incurred in creating the goods or services that a company sells are called _______.

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Cost of sales

Cost of goods sold

Cost of services

All of the above

All of the above. These are all different terms used for these expenses.

A company's cost of sales represents all of the expenses directly incurred in _______.

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Administrative duties

Creating goods or services

Borrowing money

Creating goods or services. Cost of sales is also known as cost of goods sold or cost of services.

'Sales' is another word for revenue.

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True

False

True. The two normally mean the same thing, though 'revenue' is more commonly used.

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