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Saurabh Anand 6 years, 11 months ago
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Gaurav Seth 6 years, 11 months ago
In order to calculate gross profit, you must have two important figures. First, you must have the amount of net sales for a given time period. Second, you must have the amount for cost of goods sold (COGS).
The formula for calculating gross profit is:
Gross Profit = Net Sales - Cost of Goods Sold
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Yogita Ingle 6 years, 11 months ago
The following are the rules of debit and credit which guide the system of accounts, they are known as the Golden Rules of accountancy:
- First: Debit what comes in, Credit what goes out.
- Second: Debit all expenses and losses, Credit all incomes and gains.
- Third: Debit the receiver, Credit the giver.
Gaurav Seth 6 years, 11 months ago
Real Accounting:
Dr - What comes in
Cr - What goes out
Examples of this kind of transaction include cash/bank and rent.
Personal Accounting:
Debit is the receiver.
Credit is the giver.
An example of this kind of transaction is Vendor/Customer relations.
Nominal Accounting:
All gains and income are credit.
All losses and expenses are debit.
An example of this kind of transaction is sales and/or purchases.
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Saurabh Anand 6 years, 11 months ago
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