Reconciliation of operating profits

Hi everyone, can i please get some help... why do i have to subtract, profit on vehicle sale? i thought you add profits .

Comments

  • stevesmithsstevesmiths Registered Posts: 25
    I think to determine the gross profit

    "operating profit = Profits – (Cost of goods sold + operating expenses)".
  • ashakantaxharmaashakantaxharma Guwahati, Assam, IndiaRegistered Posts: 9
    Profit on Sale of Vehicle should be Credited in Profit & Loss Account.
    Asha Kanta Sharma
    +91-98642-72826
    Guwahati, Assam, India
  • Clintm15Clintm15 Well-Known FarehamRegistered Posts: 247
    edited August 29
    I suppose it's because unless you are a car manufacturer or retailer, the sale of a vehicle doesn't factor into your gross profit.

    Operating profit = Gross profit - Operating expense.

    Sale of a vehicle would constitute 'other income' rather than sales from operations.


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