Question : Which of the following pairs is the proper match?
A: Operating expenses = Administrative expenses + selling and distribution expenses
B: (Gross profit / Net sales) × 100 = Net profit ratio
Option 1: Option A only
Option 2: Option B only
Option 3: Both of the above
Option 4: None of the above
Answer (1)
21st Jan, 2024
Correct Answer: Option A only
Solution :
Operating expenses include administrative and office expenses, as well as selling and distribution costs.
The net profit ratio is calculated by dividing sales by the net profit.
Hence option 1 is the correct answer.
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