Why Would a Discount Store Have Lower Gross Margins Than

question 8

Multiple Choice

Why would a discount store have lower gross margins than a jewellery store?

• A) Discounters are only beginning to explore gross margin in pricing decisions
• B) Discounters have a lower priced merchandise strategy
• C) Discounters traditionally do not profit as well as jewellery stores
• D) Jewellery stores cannot offer the variety that a discounter offers
• E) All of these are false statements

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Definitions:

Accounts Receivable

Amounts owed to a business by its customers from sales or services rendered on credit that are expected to be collected in cash.

Notes Receivable

Financial assets representing amounts owed to the holder by individuals or entities, usually evidenced by formal instruments of credit.

Accounting Issues

Challenges or problems encountered in the preparation, auditing, or analysis of financial statements.

Notes Receivable

A financial asset representing amounts owed to the company by others, documented by formal agreements with repayment dates and interest.