COMPUTATION OF GROSS PROFIT Flashcards

1
Q

This is an important tool and material needed in the operation of the business. It is the result when sales exceed the cost to produce or manufacture goods/merchandise as well as incurred in selling.

A

Revenue

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2
Q

It is an advance information that could help us prepare and be ready for any incoming event.

A

Forecast

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3
Q

___ is the tool used in planning that aims to support management or a business owner in its desire to adjust and cope up with uncertainties of the future

A

Forecasting

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4
Q

It is the GROSS INCOME and provides information to the entrepreneur about revenue earned sales.

A

Profit

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5
Q

It refers to the purchase price of the product including the total outlay required in producing it

A

Cost

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6
Q

The___ measures the percentage of gross profit to sales, indicating the profit that the business realizes from the sale of the product.

A

Gross profit rate

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7
Q

It is the excess of gross profit from operating expenses and is the second level of revenue in the income statement.

A

Operating profit margin

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8
Q

The ___ of the business measures the percentage of profit available after deducting the cost of sales & operating expenses of the business.

A

Operating profit margin

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9
Q

It is a measure of an organization’s profit relative to its expenses

A

Profitability

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10
Q

It refers tothe efficiency or ease with which an asset or security can be converted into ready cash without affecting its market price.

A

Liquidity

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11
Q

The most liquid asset of all is ___ itself

A

Cash

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12
Q

___ isthe ability of a company to meet its long-term debts and other financial obligations. It is also the measure of a company’s financial health, since it demonstrates a company’s ability to manage operations into the foreseeable future.

A

Solvency

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13
Q

The ___ records all the operating results such as sales, expenses, and profits or losses.

A

Financial statement

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14
Q

The ___ measures the amount of net income per peso invested to the business.

A

Return of investment (ROI)

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