Question

A simplified trading, Profit and
loss account a
comparing two years
is shown below!
Year 1
Sales Revenue 500,000
Gross Profit 300,000
Net Profil 200,000
Year 2
Sales Revenue 500,000
Gross Profit300,000
Net Profit 150,000
What caused net profit to
decrease between Year 1 and year 2 ?​

Answer 1

Answer:

increase in indirect expenses or decrease in indirect income

Explanation:

since the sales &gross profit is same

therefore the change comes in the profit and loss a/c

and in profit and loss there is indirect incomes and indirect expenses

so,

either indirect expenses increases  ,

or indirect income decreases

or both in combination

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