A Low Gross Profit Percentage Means That

question 149

Multiple Choice

A low gross profit percentage means that:

• A)the cost of goods sold was relatively low.
• B)the cost of goods sold was relatively high.
• C)selling expenses are very low.
• D)general and administrative expenses are very high.

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Definitions:

Ownership Interest

A stake or share in a company or asset, representing the rights and financial involvement of the owner.

Additional Partner

An individual or entity that joins an existing partnership, contributing capital and sharing in the profits and losses.

Contribution

The portion of sales revenue that exceeds variable costs, contributing towards covering fixed costs and generating profit.

Owners' Equity

The residual interest in the assets of a business after deducting liabilities, representing the owners' claims against the company’s resources.