Which of the Following Statements About the Profit Margin Is

question 7

Multiple Choice

Which of the following statements about the profit margin is NOT true?

• A) The profit margin indicates the percentage of sales revenue that ends up as profit.
• B) The profit margin gives some indication of pricing strategy.
• C) A supermarket would be expected to have a high profit margin.
• D) If the sales price decreases and expenses stay consistent,the profit margin will decrease.

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Definitions:

Self-Employment Income

Self-Employment Income is money earned from carrying out business activities or providing services as an independent contractor, rather than as an employee.

Advance Rental Payments

Prepayments of rent, often required by landlords, accounted for before the period of use or occupancy.

Security Deposits

Funds held by a landlord as a financial protection against damage to property or unpaid rent by a tenant, to be returned at the end of a lease term under certain conditions.

Passive Activities

Economic activities in which the individual does not materially participate, often resulting in income or losses for tax purposes.