Glossary
Mark-up
Profit expressed as a percentage of the cost price of goods.
What it means
Gross profit stated as a percentage of cost of sales, showing how much is added to cost to reach the selling price.
Example
Goods costing RM200 sold for RM250 carry a mark-up of RM50 on RM200, i.e. 25%.
Why it matters
It lets you rebuild missing figures, for example finding cost of sales from sales when records are incomplete.
In practice
Mark-up is applied to the cost figure. It appears in your reasoning about the trading account, not as a ledger entry of its own. Suppose goods costing RM200 are sold with a mark-up of 25%. The profit added is RM50 and the selling price is RM250. Because the base is cost, a mark-up can exceed 100%, unlike margin.
The most common mistake is confusing mark-up with margin. Mark-up expresses gross profit as a fraction of cost price. Margin expresses the same gross profit as a fraction of selling price. They describe the same RM50 profit from different starting points, so they give different percentages.
A useful conversion links them. A mark-up of 25% (which is 1/4) equals a margin of 1/5, or 20%. Examiners often give one and expect the other. Knowing which base each uses is essential for rebuilding missing sales or cost figures.
If incomplete-records questions feel like guesswork, one of our teachers can show you a step-by-step method with worked examples. Book a trial class.
Related terms
Syllabus reference: Cambridge 0452 and 0985, syllabus for 2027 to 2029, sub-topic 5.6 Incomplete records (page 17); sub-topic 6.1 Calculation and understanding of accounting ratios (page 18).
Definitions here are general accounting explanations for study. For your board's exact wording, see its official syllabus via Sources.
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