JAMB Commerce 2014 Paper

Concept:Net profit is the actual profit that remains after all operating and trade expenses have been subtracted from gross profit and any other income.Explanation:From the question, net profit is described as the excess of gross profit and sources of income over all expenses.So the formula is:$$\text{Net Profit} = (\text{Gross Profit} + \text{Other Income}) - \text{All Expenses}$$When there is no other income, this simplifies to:$$\text{Net Profit} = \text{Gross Profit} - \text{Trade Expenses}$$Trade expenses are the ordinary running costs of the business, such as salaries, rent, and advertising.Therefore, net profit represents what is left from gross profit after meeting such trade expenses.This makes net profit the difference between gross profit and trade expenses.Answer:A. the difference between gross profit and trade expenses