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Distinguish between 'Gross Profit' and 'Gross Pay.' (i) (ii) - Leaving Cert Business - Question 3 - 2002
Question 3
Distinguish between 'Gross Profit' and 'Gross Pay.' (i) (ii)
Worked Solution & Example Answer:Distinguish between 'Gross Profit' and 'Gross Pay.' (i) (ii) - Leaving Cert Business - Question 3 - 2002
Step 1
Distinguish between 'Gross Profit'
Answer
Gross Profit refers to the amount that remains after subtracting the Cost of Sales from total Sales. It represents the profit a company makes after deducting the costs directly associated with producing its goods or services. This figure is usually found in the Trading section of the Final Accounts, highlighting the operational efficiency of the business.
Step 2
Distinguish between 'Gross Pay'
Answer
Gross Pay is the total earnings of an employee before any deductions are made, such as taxes, retirement contributions, or health insurance. It generally includes the normal salary plus any overtime pay, bonuses, or additional earnings. Gross Pay is an essential figure for understanding an employee's total compensation from their employer.