Which of the following refers to the difference between the sale price and cost of inventory?
Correct answer: C. Markup
- A. Net loss
- B. Net worth
- C. Markup
- D. MarkdownGet Study Guides
Explanation
Markup is the amount added to cost to arrive at the selling price, so it represents the difference between cost and sale price when the item is sold above cost. Markdown is a reduction from the original selling price.
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About Business Finance
Business finance explains how organisations plan, obtain and use money while balancing risk, return and liquidity. Topics include financial statements, time value of money, budgeting, working capital, capital structure, sources of finance, investment appraisal and cost of capital. Capital budgeting evaluates long-term projects, whereas working capital manages day-to-day operations.
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