What is the difference between net income and gross profit? What will

QUESTION

What is the difference between net income and gross profit?

What will be an ideal response?

ANSWER

Answer: Gross profit, or gross margin, is the amount remaining after the cost of goods sold is subtracted from the net sales. Net income is the firm’s profit or loss after paying income taxes, and it is determined by subtracting expenses from revenues.
Explanation: Where gross profit is the amount remaining after the cost of goods sold is subtracted from the net sales, net income reduces this number further by subtracting expenses from revenues.