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Which of the following statements is TRUE with regard to gross margin?
A. Gross margin is equal to net sales less cost of goods sold.
B. Gross margin is another term for net income.
C. Gross margin is equal to revenues less operating expenses.
D. Gross margin is the top line of the income statement.

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shanimapitt990

ANSWER: (A)

EXPLANATION: Gross margin is the difference between revenue and cost of goods sold divided by revenue. Gross margin is expressed as a percentage. Generally, it is calculated as the selling price of an item, less the cost of goods sold. Gross Margin is often used interchangeably with Gross Profit, but the terms are different.

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