Question 8
- Explain the following business terms:
- Net sales;
- Rate of turnover;
- Net profit.
Candidates were required to calculate the following balances given:
- The cost of goods sold;
- The net profit;
- The rate of turnover.
Observation
The few candidates that attempted this question did not perform well.
The expected responses to the question include:
(a) (i) Net Sales: it is gross sales of a business less return inwards
(ii) Rate of turnover: it is the number of times the stock of a business is sold during a given period;
(iii) Net Profit: it is the gross profit of a business less its expenses
i.e. gross profit minus total expenses;
b) Calculation
