The Point at Which Sales and Costs Are Equal and a Business

question 48

Multiple Choice

The point at which sales and costs are equal and a business is neither making or losing money is called

• A) Profit
• B) Gross margin
• C) Breakeven point
• D) Net income

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Definitions:

Purchase Discounts

Reductions in price given by suppliers to buyers as an incentive for early payment of invoices or bulk purchases.

Freight In

The cost associated with transporting goods from suppliers to the recipient, typically recorded as part of inventory cost.

Net Purchases

The total amount of purchases after subtracting any returns, allowances, and discounts over a specific period.

Purchase Returns

Occurs when a buyer returns merchandise that it had purchased from a supplier, often due to issues like defects or dissatisfaction.