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Profit and Loss Quiz Flashcards | StudBud

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How is gross profit calculated?

Which of the following statements about a profit and loss account is untrue?

Profit and Loss Quiz

10 terms·StudBud Administration·120 plays

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Questions 10

Answers

1
Which of the following statements about a profit and loss account is untrue?
It shows how much profit a business has made
It provides information to stakeholders on the performance
It shows the cost of stock used by the business
It shows the cash position of the business
2
How is gross profit calculated?
Sales - Expenses
Sales + Cost of Sales
Sales + Expenses
Sales - Cost of Sales
3
Cost of sales looks at which costs in a business?
Indirect Costs
Expenses
Direct Costs
Fixed Costs
4
Cost of Sales includes
Raw materials
Electricity
Rent
Insurance
5
Which one of the following terms is the odd one out?
Sales Revenue
Sales
Sales Turnover
<p>Cost of Sales</p>
6
Which of the following is not a use of the profit and loss account?
It can be used to calculate profit
It can be used to identify times of cash shortage
It can help the managers plan the year ahead
It can help obtain a loan
7
Which of the following would not be an expense?
Rent
Electricity
Stock
Wages
8
What could cause a drop in gross profit?
The cost of stock could have increased
Sales have increased
Rent could have increased
The business could have found a cheaper supplier
9
Which of the following is not a limitation of a profit and loss account?
It does not show reasons why profit may have gone up or down
It does not show the environmental cost of the business
It does not have a standard layout so difficult to compare
It's constructed from historical data so is out of date
10
How is net profit calculated?
Gross Profit - Sales
Gross Profit + Sales
Gross Profit - Expenses
Gross Profit - Cost of Sales