Which measure represents revenue minus COGS?

• A. Gross profit
• B. Net profit
• C. Net sales
• D. Income

Answer: (A)

Gross profit is the amount that remains from sales after subtracting the direct costs of producing or acquiring the goods sold (cost of goods sold). It focuses on the financial result of the core selling activity before accounting for other expenses like marketing, administration, taxes, or interest. Net sales or revenue would be the total sales after returns or allowances, but not after subtracting COGS. Net profit would subtract all other operating expenses and taxes from gross profit, giving bottom-line earnings. Income is a broad term that can refer to earnings in different contexts, not specifically the profit from core sales after COGS. Therefore, revenue minus COGS corresponds to gross profit.