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Profit And Loss Quiz 51 (10 MCQs)

This set of multiple-choice questions evaluates the understanding of gross profit, trading account structure, and profit and loss calculations. It covers concepts such as cost of goods sold, cost price, marked price, selling price, and profit percentage. The questions test the ability to calculate gross profit, set up equations, and apply profit percentages in various scenarios.

Quiz Instructions

Select an option to see the correct answer instantly.

1. If you sell a necklace for $ 25 and it cost you $ 15, what is your profit?

Correct Answer: Correct answer is: (B) $ 10.

Exam Relevance: GMAT, GRE, SAT, ACT

Difficulty: Easy

Concept notes: Profit is calculated as the selling price minus the cost price.

Common Mistakes: A common mistake is to add the selling price and cost price instead of subtracting.

Explanations: To find the profit, subtract the cost price from the selling price. The selling price is $25 and the cost price is $15. Therefore, the profit is $25 - $15 = $10.

Option Analysis:

Option A: Incorrect, as $20 is not the result of subtracting the cost price from the selling price.
Option B: Correct, as $10 is the result of subtracting the cost price from the selling price.
Option C: Incorrect, as $5 is not the result of subtracting the cost price from the selling price.
Option D: Incorrect, as $15 is the cost price, not the profit.

2. A shopkeeper gives a discount of 10% on the marked price of an article and still makes a profit of 20%. If the marked price is Rs. 1000, what is the cost price of the article?

Correct Answer: Correct answer is: (B) Rs.750.

Exam Relevance: CAT, GMAT, GRE, Banking Exams

Difficulty: Moderate

Concept notes: The concept involves calculating the cost price based on the marked price, discount, and profit percentage.

Common Mistakes: A common mistake is to incorrectly calculate the selling price after the discount and then apply the profit percentage to the marked price instead of the selling price.

Explanations: 1. The marked price (MP) is Rs. 1000. 2. The shopkeeper gives a discount of 10%, so the selling price (SP) is: \[ SP = MP \times (1 - \text{Discount}) = 1000 \times (1 - 0.10) = 1000 \times 0.90 = 900 \] 3. The shopkeeper makes a profit of 20% on the cost price (CP). Therefore, the selling price is 120% of the cost price: \[ SP = CP \times (1 + \text{Profit}) = CP \times 1.20 \] 4. We know the selling price is Rs. 900, so: \[ 900 = CP \times 1.20 \] 5. Solving for CP: \[ CP = \frac{900}{1.20} = 750 \]

Option Analysis:

Option A: Rs. 700 is incorrect because it does not satisfy the profit and discount conditions.
Option B: Rs. 750 is correct as it satisfies the profit and discount conditions.
Option C: Rs. 800 is incorrect because it does not satisfy the profit and discount conditions.
Option D: Rs. 850 is incorrect because it does not satisfy the profit and discount conditions.

3. Aman sold an article at a loss of 20%. If he had sold it for Rs.12 more,he would have made 10% profit. The CP of the article is

Correct Answer: Correct answer is: (A) Rs 40.

Exam Relevance: CAT, GMAT, GRE, Bank PO, SSC CGL

Difficulty: Moderate

Concept notes: The problem involves understanding the relationship between cost price (CP), selling price (SP), profit, and loss. The key is to set up equations based on the given conditions and solve for the cost price.

Common Mistakes: A common mistake is to misinterpret the relationship between the selling price and the cost price, leading to incorrect equations or calculations.

Explanations: Let the cost price (CP) of the article be $ x $. 1. Aman sold the article at a loss of 20%, so the selling price (SP) is: \[ \text{SP} = x - 0.2x = 0.8x \] 2. If he had sold it for Rs. 12 more, he would have made a 10% profit. Therefore, the new selling price would be: \[ \text{New SP} = x + 0.1x = 1.1x \] 3. According to the problem, the new selling price is Rs. 12 more than the original selling price: \[ 1.1x = 0.8x + 12 \] 4. Solving for $ x $: \[ 1.1x - 0.8x = 12 \] \[ 0.3x = 12 \] \[ x = \frac{12}{0.3} \] \[ x = 40 \] Thus, the cost price of the article is Rs. 40.

Option Analysis:

Option A: Rs 40. (Correct)
Option B: Rs. 50. (Incorrect)
Option C: Rs. 10. (Incorrect)
Option D: Rs. 12. (Incorrect)

4. If the cost price is 96 % of selling price, then find the profit percent.

Correct Answer: Correct answer is: (C) 4.16 %.

Exam Relevance: CAT, GMAT, GRE, SAT

Difficulty: Moderate

Concept notes: The cost price (CP) is given as 96% of the selling price (SP). We need to find the profit percentage, which is calculated as the difference between the selling price and the cost price, divided by the cost price, and then multiplied by 100.

Common Mistakes: A common mistake is to assume that the profit percentage can be directly calculated from the given percentage without converting it into a ratio or fraction.

Explanations: Let the selling price (SP) be 100 units. Then, the cost price (CP) is 96 units. Profit = SP - CP = 100 - 96 = 4 units. Profit percentage = (Profit / CP) * 100 = (4 / 96) * 100 = 4.16%.

Option Analysis:

Option A: 15% is incorrect because it does not match the calculated profit percentage.
Option B: 13.26% is incorrect because it does not match the calculated profit percentage.
Option C: 4.16% is correct as it matches the calculated profit percentage.
Option D: Incomplete question is incorrect because the question provides sufficient information to calculate the profit percentage.

5. You sell T-shirts. If you bought them for Rs. 100 each and sell them for Rs. 120 each, how much PROFIT can you make if you sell 10 T-shirts?

Correct Answer: Correct answer is: (A) Rs. 200.

Exam Relevance: CAT, GMAT, GRE, SAT

Difficulty: Easy

Concept notes: Profit is calculated as the difference between the selling price and the cost price, multiplied by the number of items sold.

Common Mistakes: A common mistake is to calculate the profit per item and not multiply it by the number of items sold.

Explanations: To find the profit, first calculate the profit per T-shirt: Profit per T-shirt = Selling price - Cost price Profit per T-shirt = Rs. 120 - Rs. 100 = Rs. 20 Next, multiply the profit per T-shirt by the number of T-shirts sold: Total profit = Profit per T-shirt × Number of T-shirts Total profit = Rs. 20 × 10 = Rs. 200

Option Analysis:

Option A: Correct. The total profit from selling 10 T-shirts is Rs. 200.
Option B: Incorrect. This is the profit per T-shirt, not the total profit.
Option C: Incorrect. This is not the correct total profit.
Option D: Incorrect. The correct answer is provided in the options.

6. Gross profit is calculated in

Correct Answer: Correct answer is: (C) Trading account.

Exam Relevance: CA Final, CFA Level 1, ACCA

Difficulty: Moderate

Concept notes: Gross profit is the difference between the total sales revenue and the cost of goods sold. It is calculated in the trading account, which is a part of the profit and loss account.

Common Mistakes: A common misunderstanding is that gross profit is calculated in the profit and loss account directly, but it is actually calculated in the trading account first.

Explanations: Gross profit is calculated in the trading account. The trading account shows the gross profit or loss by subtracting the cost of goods sold from the total sales revenue. This figure is then transferred to the profit and loss account to calculate the net profit or loss.

Option Analysis:

Option A: The balance sheet does not include the calculation of gross profit. It shows the financial position of a company at a specific point in time.
Option B: The profit and loss account includes the gross profit figure, but it is not where the gross profit is calculated. The gross profit is calculated in the trading account and then transferred to the profit and loss account.
Option C: The trading account is where the gross profit is calculated by subtracting the cost of goods sold from the total sales revenue.
Option D: The ledger is a collection of accounts and does not specifically calculate gross profit.

7. Shikha purchased a wrist watch for Rs 840 and sold it to her friend Vidhi for Rs 910. Find her gain percent.

Correct Answer: Correct answer is: (D) 8.3%.

Exam Relevance: CAT, GMAT, GRE, SAT, Competitive Exams

Difficulty: Moderate

Concept notes: The concept of profit and loss involves calculating the gain or loss percentage based on the cost price and selling price.

Common Mistakes: A common mistake is to confuse the formula for calculating profit percentage with the formula for loss percentage.

Explanations: To find the gain percent, we use the formula: \[ \text{Gain Percent} = \left( \frac{\text{Gain}}{\text{Cost Price}} \right) \times 100 \] First, calculate the gain: \[ \text{Gain} = \text{Selling Price} - \text{Cost Price} = 910 - 840 = 70 \] Next, calculate the gain percent: \[ \text{Gain Percent} = \left( \frac{70}{840} \right) \times 100 = \frac{7000}{840} \approx 8.33\% \] Thus, the gain percent is approximately 8.3%.

Option Analysis:

Option A: 8% is incorrect because the exact calculation yields 8.33%, not 8%.
Option B: 9% is incorrect because the exact calculation yields 8.33%, not 9%.
Option C: 5% is incorrect because the exact calculation yields 8.33%, not 5%.
Option D: 8.3% is correct as it matches the calculated gain percent.

8. Lyndee bought an old coffee table at a garage sale. She repaired it and updated it, then she sold it for a profit. Here is a list of what Lyndee did:*price paid for coffee table: $ 11*price paid for decals: $ 3*cost for paint: $ 4*selling price: $ 38.50

Correct Answer: Correct answer is: (B) $ 20.50.

Exam Relevance: GMAT, GRE, SAT, ACT

Difficulty: Moderate

Concept notes: Profit is calculated as the selling price minus the total cost. The total cost includes the price paid for the coffee table, the price paid for decals, and the cost for paint.

Common Mistakes: A common mistake is to forget to include all the costs in the total cost calculation, leading to an incorrect profit amount.

Explanations: To find the profit, we need to calculate the total cost first. The total cost is the sum of the price paid for the coffee table, the price paid for decals, and the cost for paint. Total cost = $11 + $3 + $4 = $18 Next, we subtract the total cost from the selling price to find the profit. Profit = Selling price - Total cost Profit = $38.50 - $18 = $20.50 Thus, the profit is $20.50.

Option Analysis:

Option A: $18 is incorrect because it does not account for the selling price minus the total cost.
Option B: $20.50 is correct as it accurately reflects the profit calculation.
Option C: $27.50 is incorrect because it does not correctly subtract the total cost from the selling price.
Option D: $20 is incorrect because it does not accurately reflect the profit calculation.

9. An engineer spent Rs. 24,500 to assemble a computer. He sold it at a profit of Rs. 8,250. At what price did he sell it?

Correct Answer: Correct answer is: (B) 32,750.

Exam Relevance: CAT, GMAT, GRE, SAT

Difficulty: Easy

Concept notes: The concept of profit and loss involves calculating the selling price based on the cost price and the profit earned.

Common Mistakes: A common mistake is to confuse the cost price with the selling price or to miscalculate the total selling price by not adding the profit to the cost price.

Explanations: The cost price of the computer is Rs. 24,500. The profit made is Rs. 8,250. The selling price is calculated by adding the profit to the cost price: \[ \text{Selling Price} = \text{Cost Price} + \text{Profit} \] \[ \text{Selling Price} = 24,500 + 8,250 = 32,750 \]

Option Analysis:

Option A: 31,950. This is incorrect because it does not account for the full profit amount.
Option B: 32,750. This is the correct answer as it correctly adds the profit to the cost price.
Option C: 32,850. This is incorrect because it adds an extra Rs. 100 to the correct selling price.
Option D: 30,950. This is incorrect because it does not account for the full profit amount.

10. If an object is bought for $ 65 and sold for $ 78 how much was the profit percent or loss percent?

Correct Answer: Correct answer is: (A) 20% profit.

Exam Relevance: GMAT, GRE, SAT, Competitive Exams

Difficulty: Easy

Concept notes: Profit percentage is calculated as the profit divided by the cost price, multiplied by 100.

Common Mistakes: A common mistake is to confuse profit percentage with the profit amount or to miscalculate the percentage.

Explanations: To find the profit percentage, first calculate the profit: Profit = Selling Price - Cost Price Profit = $78 - $65 = $13 Next, calculate the profit percentage: Profit Percentage = (Profit / Cost Price) * 100 Profit Percentage = ($13 / $65) * 100 = 20% Thus, the profit percentage is 20%.

Option Analysis:

Option A: Correct. The profit percentage is 20%.
Option B: Incorrect. There is a profit, not a loss.
Option C: Incorrect. The profit percentage is 20%, not 17%.
Option D: Incorrect. There is a profit, not a loss.

Frequently Asked Questions

What is the difference between cost price and selling price?

The cost price is the amount paid to acquire a product, while the selling price is the amount at which the product is sold to a customer.

How is profit percentage calculated?

Profit percentage is calculated by dividing the profit by the cost price and then multiplying by 100 to get a percentage.

What is the significance of the marked price in profit and loss calculations?

The marked price is the price set by the seller before any discount is applied, and it helps in determining the discount percentage and the final selling price.

How does a discount affect the selling price?

A discount reduces the selling price from the marked price, making the final selling price lower than the marked price.

What is the role of equations in solving profit and loss problems?

Equations help in setting up relationships between different variables such as cost price, selling price, profit, and loss, allowing for systematic problem-solving.

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