After The Merchant Buys Merchandise, It Is Sold At A Higher Price Called The

Solution To Multiple Choice Question (MCQ)

After the merchant buys merchandise, it is sold at a higher price called the Selling Price (SP) because the goods or merchandise purchased at the cost price but sold by merchant or seller at selling price to get profit out of Sales. He earned a percentage of profit on every sales made to buyer during the accounting cycle.

SP is equal to the cost plus gross profit while gross profit is the difference between SP and cost of the merchandise / goods / products as shown below:

SP   =   Cost + Gross Profit

Gross Profit  =  SP  -  Cost

If the seller sells the goods at cost price, then at this point he gained no profit and suffered no loss called break even point.

The difference between selling price and sale price is that SP is the price at which the goods is actually sold to buyer while sale price is the price of goods offered to buyer at a discount.

In revenue discount, the Revenue is earned after giving discount to customers on products sold or services rendered.