What is most accurate about gross profit?

Gross profit is most accurately defined as the difference between total revenue and the cost of goods sold (COGS), which represents the profit a company makes before deducting operating expenses, interest, taxes, and other costs. Therefore, saying it is the profit before any costs and taxes are deducted correctly captures its essence.

Gross profit essentially focuses on the efficiency of production and sales, providing a clear picture of how much money is left over after accounting for the cost of producing the goods or services sold. It is a critical measure for understanding the fundamental profitability of a business's core operations without the influence of overhead and other costs.

The other options do not accurately reflect the concept of gross profit. For example, stating that it includes total revenue after expenses muddles the definition, as gross profit does not factor in expenses beyond COGS. Similarly, subtracting selling price from costs mistakenly conflates gross profit with other measures such as net profit or markup. Lastly, representing gross profit as total revenue minus total costs is inaccurate since gross profit specifically excludes operating expenses, interest, taxes, and any non-operating costs.