Profit/Loss/Gross-Margin Meanings

Question 1

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

Answer 1

Margin a.k.a. Gross Margin

Question 2

The gross margin is also the ____________

Answer 2

gross profit or markup.

Question 3

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

Answer 3

Markup

Question 4

is addressing the profit based on the selling price, while
markup addresses the profit based on cost.

Answer 4

Margin

Question 5

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

Answer 5

Trade Discount

Question 6

Trade discounts could either
be a ____________

Answer 6

single discount or a
series of discount.

Question 7

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

Answer 7

Discount
Series

Question 8

In our daily life, we buy commodities from the vendors in the market which they buy
either directly from the ______________ For them to bring
in money and to avoid bankruptcy, they increase the selling price of their goods
before selling to the public.

Answer 8

manufacturers or through the wholesalers.

Question 9

How much the seller buys the item is the cost of
the item. It is termed cost of goods sold or cost of
sales.

Answer 9

Cost

Question 10

It refers to the amount left of the selling price after all costs and
expenses had been deducted. It is computed using the formula:

Answer 10

Profit

Question 11

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

Answer 11

Loss

Question 12

Also known as Gross margin, it appears on a company’s income statement and can be calculated using this formula:

Answer 12

Gross Profit

Question 13

Refers to the expenses incurred to run the business.

Answer 13

Operating Expenses

Question 14

Refer to operating expenses (administrative and selling expenses) and financial expenses (interest
and other finance charges) may appear on a company’s income statement.

Answer 14

Expenses

Question 15

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

Answer 15

Operating Profit/Loss

Question 16

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

Answer 16

Other Income

Question 17

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

Answer 17

Other Expense

Question 18

Net profit forms part of a business’ income statement.

Answer 18

Net Profit/Loss

Question 19

forms part of a business’ income statement

Answer 19

Net Profit

Question 20

A trading or merchandising firm buys goods that it sells.

Answer 20

Income Statement for a Trading Firm

Question 21

The account is used to report the selling price of the merchandise is ___________ while ________ refer to
total sales.

Answer 21

sales, gross sales

Question 22

It is the financial statement that shows the results of the operation, that is if it earns a profit or incurs a loss for a given time. Generally, a firm prepares financial statements on a monthly basis.

Answer 22

Income statement

Question 23

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 23

Income statement

Question 24

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

Answer 24

Break-even Point

Question 25

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

Answer 25

Break-even analys

Question 26

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

Answer 26

break-even analysis

Question 27

Often referred to as overhead or operating expenses, it refers to
those expenses associated with running a business that can’t be linked to creating or
producing a product or service.

Answer 27

Overhead costs

Question 28

There are two basic types of costs a company incurs.

Answer 28

Variable Costs
Fixed Costs

Question 29

Are costs that change with changes in production levels or sales.

Answer 29

Variable costs

Question 30

Remain roughly the same regardless of sales/output levels.

Answer 30

Fixed costs

Question 31

Is the interest that is computed on the principal and then added
to it.

Answer 31

Simple Interest

Question 32

Is a person (or institution) who invests the money or makes the
funds available.

Answer 32

Lender or creditor

Question 33

Is a person (or institution) who owes the money or avails Of the
funds from the lender.

Answer 33

Borrower or debtor

Question 34

Is the amount t years that the lender receives
from the borrower on the maturity date.

Answer 34

Maturity Value or Future Value

Question 35

Is a type of loan which is secured by some physical property such as
real estate hence it involves big amount.

Answer 35

Mortgage Loan

Question 36

Is the person who borrows the money for a mortgage.

Answer 36

Mortgagor

Question 37

Is the lender of money for a mortgage

Answer 37

Mortgagee

Question 38

Is a type of payment made in cash during the onset of the purchase of
an expensive good or service.

Answer 38

Down Payment

Question 39

Is a debt-payment scheme wherein the original amount borrowed is
repaid by making equal payments periodically.

Answer 39

Amortization

Question 40

Is a table showing the monthly payments on a loan
acquired including the interest and balance.

Answer 40

amortization table