When sales discounts in the current year exceed sales discounts in the prior year,assuming all else remains unchanged,what is the effect on the gross profit percentage?
A)The percentage will not change.
B)The percentage will increase.
C)The percentage will decrease.
D)Either (A)or (B).

Question

Quizplus · Accepted Answer

When sales discounts increase in the current year, it means that customers are taking advantage of discounts more frequently or the company is offering more discounts, which can lower the gross profit percentage. Therefore, the percentage will decrease.

When Sales Discounts in the Current Year Exceed Sales Discounts