BM Meanings Flashcards
refers to the price by which a product or an
item was bought.
Cost
refers to the amount added to cost to obtain the original selling price.
Initial mark-up or mark-on
refers to the amount added to the original selling price to arrive at a new
selling price.
Additional mark-up
refers to the decrease in the new selling price that does not
reduce below the original selling price.
Mark-up cancellation
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.
Markdown
Is usually expressed as a percent
of the new reduced selling price.
markdown rate
Is selling price minus the cost of goods sold (cost).
Margin a.k.a. Gross Margin
The gross margin is also the
gross profit or markup.
Margin stated as percent
margin percentage or % margin
Is the amount by which the cost of a product or item is increased in
order to come up with the selling price.
Markup
is addressing the profit based on the selling price
Margin
Addresses the profit based on cost.
markup based on cost
if the selling price is taken as 100%, it being the base (B).
Markup Based on Selling Price (Margin)
The cost is the base
Markup Based on Cost (markup)
Refers to a reduction from
the list price given to
customers or buyers at the
discretion of the seller.
Trade
Discount
Trade discounts could either
be a _________
single discount or a
series of discount.
A seller, in some instance, offers
additional discounts based on a
number of different conditions other
than the discount usually given.
Discount
Series
It refers to the amount left of the selling price after all costs and
expenses had been deducted.
Profit
occurs when the cost and expenses exceed the selling price or sales.
Loss
it appears on a company’s
income statement
Gross Profit
- Refers to the expenses incurred to run the business.
Operating Expenses
Refers to the profit from business operations that appear on a
company’s income statement.
Operating Profit/Loss
includes interest income and other
incidental income the firm earns like rent income if
it has a property that it rents out.
Other Income
includes interest expense or finance
charges financial institutions charge firms to their
services.
Other Expense
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.
Net profit
A trading or merchandising firm buys goods that it
sells.
Income Statement for a Trading Firm
The account used to report the selling price of
the merchandise is _________
sales
refers to
total sales.
gross sales
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.
income statement
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.
income statement
This happens when a business has no profit or loss. In
case, the amount of expenses is equal to the amount of cost.
Break-even Point
Is used to determine how much sales volume your
business needs to start making a profit.
Break-even analys
is especially useful when you’re developing a
pricing strategy, either as part of a marketing plan or a business plan.
fit
break-even analysis
