A Retailer Sells All Goods on a Rate of Mark-Up

question 42

Multiple Choice

A retailer sells all goods on a rate of mark-up on selling price of 25%. If she later marks down any unsold products to their cost, what is the rate of markdown?

• A) 25%
• B) 33.3%
• C) 20%
• D) 30%
• E) 22.5%

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Definitions:

ABC Corporation

A hypothetical or generic naming convention used to represent a company in examples or case studies.

Net Income

The amount of money a company keeps as profit once all taxes and expenses are deducted from its total income.

Accounting Records

Documents and ledgers that record financial transactions and the financial position of an entity, serving as the basis for financial reporting and analysis.

Service Department Charge Rate

A rate used to allocate service department costs to the products or services produced, often based on the time or resources each product uses.