Reconciliation of operating profits
Amika
Registered Posts: 1
Hi everyone, can i please get some help... why do i have to subtract, profit on vehicle sale? i thought you add profits .
0
Comments
-
I think to determine the gross profit
"operating profit = Profits – (Cost of goods sold + operating expenses)".1 -
Profit on Sale of Vehicle should be Credited in Profit & Loss Account.Asha Kanta Sharma
+91-98642-72826
Guwahati, Assam, India0 -
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.
AAT
Level 2 - 2011
Level 3 - 2012
Level 4 - 2013
ACCA
F4 - Corporate Law - Dec 2015 (passed)
F5 - Performance Management - Dec 2014 (passed)
F6 - Taxation - Dec 2013 (passed)
F7 - Financial Reporting - Jun 2014 (passed)
F8 - Audit & Assurance - Dec 2015 (passed)
F9 - Financial Management - Jun 2015 (passed)1
