Determination of Net Profit And Loss - SS1 Accounting Past Questions and Answers - page 1
What is deducted from the revenue to calculate gross profit in a profit and loss account?
Operating expenses
Cost of goods sold
Other income and expenses
What is operating profit in a profit and loss account?
Total revenue minus total expenses
Gross profit minus operating expenses
Total expenses minus total revenue
What are other income and expenses in a profit and loss account?
The direct costs of producing a company's products or services
The costs incurred by a company to operate its business
The non-operating items that affect a company's profit or loss
How is net profit or loss calculated in a profit and loss account?
Revenue minus gross profit
Gross profit minus operating expenses
Revenue minus total expenses
What does a positive net profit indicate in a profit and loss account?
The company made a loss during the period
The company made a profit during the period
The revenue and expenses were equal during
What is the purpose of calculating net profit or loss in a profit and loss account?
The purpose of calculating net profit or loss is to determine the financial performance of a business over a specific period of time and to make informed decisions about future investments and strategies.
How can a company improve its net profit in a profit and loss account?
A company can improve its net profit by increasing its revenues, reducing its expenses, or both. This can be achieved through various strategies such as increasing sales, reducing costs, improving productivity, or expanding into new markets.