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JAMB Principles of Accounts 2000 Question 5

Question 5

Interpretation of Accounts

Use the information below to answer questions 4 and 5.
(₦)
Sales 20,000
Cost of sales 10,000
Operating expenses 2,500
Expenses prepaid included in operating expense 500
What is the gross profit margin?

  1. A.100%
  2. B.50%
  3. C.40%
  4. D.30%.
Show the answer and explanation

Answer: B (50%)

Explanation

Gross profit = 20,000 − 10,000 = 10,000. Margin = 10,000 ÷ 20,000 = 50%.