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Cost of goods sold and gross profit: Class 11 practice

Cost of goods sold = opening stock + purchases + direct expenses − closing stock. Read the method, follow the three worked examples, then try the six questions.

What you should know first

  • Basic accounting terms

The idea behind cost of goods sold and gross profit

Cost of goods sold = opening stock + purchases + direct expenses − closing stock. Gross profit = net sales − cost of goods sold. Net sales = sales − sales returns.

Step-by-step method

  1. Net purchases and net sales (deduct returns).
  2. COGS = opening + net purchases + direct expenses − closing.
  3. Gross profit = net sales − COGS.

Worked example 1 (Basic)

Opening stock ₹80,000, purchases ₹1,50,000, carriage inwards ₹20,000, closing stock ₹90,000, sales ₹2,18,000, sales returns ₹5,000. Find cost of goods sold.

  1. COGS = ₹80,000 + ₹1,50,000 + ₹20,000 − ₹90,000 = ₹1,60,000
  2. Net sales = ₹2,13,000
  3. Gross profit = ₹53,000
  4. Answer: ₹1,60,000

Worked example 2 (Standard)

Opening stock ₹50,000, purchases ₹2,90,000, carriage inwards ₹0, closing stock ₹50,000, sales ₹3,99,000, sales returns ₹5,000. Find gross profit.

  1. COGS = ₹50,000 + ₹2,90,000 + ₹0 − ₹50,000 = ₹2,90,000
  2. Net sales = ₹3,94,000
  3. Gross profit = ₹1,04,000
  4. Answer: ₹1,04,000

Worked example 3 (Challenge)

Opening stock ₹50,000, purchases ₹2,30,000, carriage inwards ₹5,000, closing stock ₹40,000, sales ₹3,16,000, sales returns ₹10,000. Find gross profit.

  1. COGS = ₹50,000 + ₹2,30,000 + ₹5,000 − ₹40,000 = ₹2,45,000
  2. Net sales = ₹3,06,000
  3. Gross profit = ₹61,000
  4. Answer: ₹61,000

Common mistakes and misconceptions

  • Adding closing stock
  • Treating office expenses as direct expenses

Practice questions

  1. (Basic) Opening stock ₹80,000, purchases ₹2,80,000, carriage inwards ₹0, closing stock ₹10,000, sales ₹4,81,000, sales returns ₹5,000. Find cost of goods sold.
  2. (Basic) Opening stock ₹40,000, purchases ₹2,40,000, carriage inwards ₹15,000, closing stock ₹90,000, sales ₹2,76,000, sales returns ₹5,000. Find cost of goods sold.
  3. (Standard) Opening stock ₹50,000, purchases ₹2,20,000, carriage inwards ₹25,000, closing stock ₹90,000, sales ₹2,61,000, sales returns ₹15,000. Find gross profit.
  4. (Standard) Opening stock ₹1,00,000, purchases ₹1,10,000, carriage inwards ₹10,000, closing stock ₹30,000, sales ₹2,52,000, sales returns ₹5,000. Find gross profit.
  5. (Challenge) Opening stock ₹20,000, purchases ₹3,90,000, carriage inwards ₹25,000, closing stock ₹80,000, sales ₹4,09,000, sales returns ₹15,000. Find gross profit.
  6. (Challenge) Opening stock ₹60,000, purchases ₹1,50,000, carriage inwards ₹5,000, closing stock ₹70,000, sales ₹2,09,000, sales returns ₹15,000. Find gross profit.

Answer key with full working

  • Q1: COGS = ₹80,000 + ₹2,80,000 + ₹0 − ₹10,000 = ₹3,50,000 → Net sales = ₹4,76,000 → Gross profit = ₹1,26,000 → Answer: ₹3,50,000
  • Q2: COGS = ₹40,000 + ₹2,40,000 + ₹15,000 − ₹90,000 = ₹2,05,000 → Net sales = ₹2,71,000 → Gross profit = ₹66,000 → Answer: ₹2,05,000
  • Q3: COGS = ₹50,000 + ₹2,20,000 + ₹25,000 − ₹90,000 = ₹2,05,000 → Net sales = ₹2,46,000 → Gross profit = ₹41,000 → Answer: ₹41,000
  • Q4: COGS = ₹1,00,000 + ₹1,10,000 + ₹10,000 − ₹30,000 = ₹1,90,000 → Net sales = ₹2,47,000 → Gross profit = ₹57,000 → Answer: ₹57,000
  • Q5: COGS = ₹20,000 + ₹3,90,000 + ₹25,000 − ₹80,000 = ₹3,55,000 → Net sales = ₹3,94,000 → Gross profit = ₹39,000 → Answer: ₹39,000
  • Q6: COGS = ₹60,000 + ₹1,50,000 + ₹5,000 − ₹70,000 = ₹1,45,000 → Net sales = ₹1,94,000 → Gross profit = ₹49,000 → Answer: ₹49,000

Syllabus note

This skill is listed under "Financial Statements" for Class 11 in the NCERT/CBSE books. ICSE, IGCSE, IB and state boards may teach it in a different chapter or year.

Answers on this page are generated and automatically re-checked by a second, independent calculation. They have not been reviewed by a teacher — if you spot a problem, tell us on WhatsApp.

Related practice and notes

Frequently asked questions

Which chapter is cost of goods sold and gross profit in?

"Financial Statements", Class 11 Accountancy (NCERT/CBSE). Other boards may place it differently.

How were the answers checked?

Answers on this page are generated and automatically re-checked by a second, independent calculation. They have not been reviewed by a teacher — if you spot a problem, tell us on WhatsApp.

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