The gross margin is added to the cost of sold goods to calculate: ____________?
Correct answer: A. revenues
- A. revenues
- B. selling price
- C. unit price
- D. bundle price
Explanation
Gross margin is revenue minus cost of goods sold; therefore, adding gross margin back to cost of goods sold gives revenue. Selling price and unit price are narrower terms and are not the stated total relationship.
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About Financial Statements
Financial statements present a business's financial performance and position through the income statement, statement of financial position, cash flow statement and changes in equity. Questions involve preparing and interpreting these statements, adjusting entries, depreciation, closing inventory, accrued and prepaid items, and distinguishing profit from cash flow.
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