O-LevelAccountingAnalysis and interpretation7707/12 · Oct/Nov 2021 · Q311 Mark

A business provided the following information about its gross margin. Year 1 40% Year 2 38% Year 3 35% What could explain the changes in the gross margin?

ACost of sales is decreasing.

BExpenses are decreasing.

CQuantity of goods sold is decreasing.

DSelling price is decreasing.

✓ Correct answer

D: Selling price is decreasing.

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Topic: Analysis and interpretation, O-Level Accounting (syllabus 7707). Multiple choice, 1 mark.
Source: O-Level Accounting, Oct/Nov 2021 Paper 1 Variant 2, question 31.

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