Which of the following equations correctly describes how to calculate gross profit? a. gross profit = (net sales) - (cost of goods sold) b. gross profit = (cost of goods sold) - (net sales) c. gross profit = (net income) - (operating expenses) d. gross profit = (operating expenses) - (net income)

The "a. gross profit = (net sales) - (cost of goods sold) " equation correctly describes how to calculate gross profit based on its position in an income statement. The gross profit is the income received by a company by selling its product only, excluding every service expenses that have occurred. Thus, the equation above is the most suitable answer.