PRC-1 · Chapter 10 · Question 81 of 100
How does 'Return Inwards' (Sales Returns) affect the calculation of Gross Profit?
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: B) It is deducted from Gross Sales, decreasing Gross Profit.
Explanation
Return inwards represent goods returned by customers. They reduce total sales revenue (forming Net Sales), which consequently lowers the calculated Gross Profit.
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