Accounting / July 19, 2018 / Khloe Santiago
Gross Profit A company's gross profit does more than simply represent the difference between net sales and the cost of sales. Gross profit provides the resources to cover all of the company's other expenses. Obviously, the greater and more stable a company's gross margin, the greater potential there is for positive bottom line (net income) results.
In some cases, your business may choose to use cash accounting. Cash-based accounting is simple in comparison to accrual accounting. Sales are posted when the cash is received from the customer, regardless of the date that the product was delivered. Expenses are posted in the same manner, or when the cash is disbursed to pay the bill. Smaller businesses and businesses that do not carry inventory often use the cash basis of accounting.
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