BM Meanings

Question 1

refers to the price by which a product or an
item was bought.

Answer 1

Cost

Question 2

refers to the amount added to cost to obtain the original selling price.

Answer 2

Initial mark-up or mark-on

Question 3

refers to the amount added to the original selling price to arrive at a new
selling price.

Answer 3

Additional mark-up

Question 4

refers to the decrease in the new selling price that does not
reduce below the original selling price.

Answer 4

Mark-up cancellation

Question 5

refers to the reduction in the original selling price. Traders
usually, do this to sell out the remaining products or items that were not sold in a specific period of time.

Answer 5

Markdown

Question 6

Is usually expressed as a percent
of the new reduced selling price.

Answer 6

markdown rate

Question 7

Is selling price minus the cost of goods sold (cost).

Answer 7

Margin a.k.a. Gross Margin

Question 8

The gross margin is also the

Answer 8

gross profit or markup.

Question 9

Margin stated as percent

Answer 9

margin percentage or % margin

Question 10

Is the amount by which the cost of a product or item is increased in
order to come up with the selling price.

Answer 10

Markup

Question 11

is addressing the profit based on the selling price

Answer 11

Margin

Question 12

Addresses the profit based on cost.

Answer 12

markup based on cost

Question 13

if the selling price is taken as 100%, it being the base (B).

Answer 13

Markup Based on Selling Price (Margin)

Question 14

The cost is the base

Answer 14

Markup Based on Cost (markup)

Question 15

Refers to a reduction from
the list price given to
customers or buyers at the
discretion of the seller.

Answer 15

Trade
Discount

Question 16

Trade discounts could either
be a _________

Answer 16

single discount or a
series of discount.

Question 17

A seller, in some instance, offers
additional discounts based on a
number of different conditions other
than the discount usually given.

Answer 17

Discount
Series

Question 18

It refers to the amount left of the selling price after all costs and
expenses had been deducted.

Answer 18

Profit

Question 19

occurs when the cost and expenses exceed the selling price or sales.

Answer 19

Loss

Question 20

it appears on a company’s
income statement

Answer 20

Gross Profit

Question 21

• Refers to the expenses incurred to run the business.

Answer 21

Operating Expenses

Question 22

Refers to the profit from business operations that appear on a
company’s income statement.

Answer 22

Operating Profit/Loss

Question 23

includes interest income and other
incidental income the firm earns like rent income if
it has a property that it rents out.

Answer 23

Other Income

Question 24

includes interest expense or finance
charges financial institutions charge firms to their
services.

Answer 24

Other Expense

Question 25

forms part of a business’ income statement. It is what
is left after all the costs of a business have been added up and
taken from its sales revenue.

Answer 25

Net profit

Question 26

A trading or merchandising firm buys goods that it
sells.

Answer 26

Income Statement for a Trading Firm

Question 27

The account used to report the selling price of
the merchandise is _________

Answer 27

sales

Question 28

refers to
total sales.

Answer 28

gross sales

Question 29

is the financial statement that
shows the results of operation, that is, if it earns a profit
or incurs a loss for a given of time.

Answer 29

income statement

Question 30

For tax purposes, it is prepared quarterly and annually. It
details the sales (revenue), the cost of sales (cost of good
sold), the operating expenses, and other expense and/or
other income if any.

Answer 30

income statement

Question 31

This happens when a business has no profit or loss. In
case, the amount of expenses is equal to the amount of cost.

Answer 31

Break-even Point

Question 32

Is used to determine how much sales volume your
business needs to start making a profit.

Answer 32

Break-even analys

Question 33

is especially useful when you’re developing a
pricing strategy, either as part of a marketing plan or a business plan.
fit

Answer 33

break-even analysis