O-LevelAccountingAnalysis and interpretation7707/12 · May/June 2021 · Q331 Mark

Company X and Company Y provided the following information. gross margin Company X 36.7% Company Y 42.6% profit margin Company X 5.4% Company Y 5.4% Which statement is correct?

ABoth companies earned the same amount of profit for the year.

BCompany X had a better gross margin than Company Y.

CCompany Y had a larger proportion of expenses than Company X.

DThe cost of sales of Company X was lower than that of Company Y.

✓ Correct answer

A: Both companies earned the same amount of profit for the year.

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Topic: Analysis and interpretation, O-Level Accounting (syllabus 7707). Multiple choice, 1 mark.
Source: O-Level Accounting, May/June 2021 Paper 1 Variant 2, question 33.

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