Which of the following will increase the gross profit of the merchandising business?Group of answer choicesincrease in freight-inincrease in purchase discountdecrease in freight-outdecrease in purchase return

The gross profit of a merchandising business can be increased by:

1. Increase in Purchase Discount: When a business gets a discount on its purchases, it reduces the cost of goods sold (COGS). Lower COGS means higher gross profit.

2. Decrease in Freight-out: Freight-out refers to the transportation cost of delivering goods to customers. If this cost decreases, it reduces the operating expenses of the business. While it doesn't directly affect the gross profit (which is sales minus COGS), it does increase the net profit. However, in some accounting practices, freight-out is included in COGS. In such cases, a decrease in freight-out would increase the gross profit.

3. Decrease in Purchase Return: Purchase returns are the goods that are returned to the supplier. When purchase returns decrease, it means the business retains more of the goods it purchased, which could potentially be sold to customers. This increases the gross profit.

4. Increase in Freight-in: Freight-in refers to the transportation cost of receiving goods from suppliers. An increase in freight-in would actually decrease the gross profit because it increases the COGS.

So, the correct answers are an increase in purchase discount and a decrease in purchase return and freight-out.