Identification of Profit And Loss Account Items - SS1 Accounting Past Questions and Answers - page 1
What does revenue include in a profit and loss account?
The cost of goods sold
The money a company earned during the period
The expenses incurred by a company
What is the difference between revenue and gross profit in a profit and loss account?
Revenue is the money earned by a company, and gross profit is the revenue minus operating expenses.
Revenue is the money earned by a company, and gross profit is the revenue minus the cost of goods sold.
Revenue and gross profit are the same thing.
What are operating expenses in a profit and loss account?
The costs incurred by a company to operate its business, such as rent and salaries.
The costs incurred by a company to produce its products or services.
The non-operating items that affect a company's profit or loss.
What is the purpose of other income and expenses in a profit and loss account?
To show the direct costs of producing a company's products or services.
To show the non-operating items that affect a company's profit or loss.
To show the difference between the revenue and the expenses.
What does net profit or loss represent in a profit and loss account?
The total profit or loss made by a company during the period.
The difference between the gross profit and the operating expenses.
The difference between the revenue and the cost of goods sold.
What is the difference between gross profit and operating profit in a profit and loss account?
Gross profit is the revenue minus the cost of goods sold while operating profit is the gross profit minus the operating expenses.
What is the purpose of analyzing the items in a profit and loss account?
To gain insight into a company's financial performance, identify areas for improvement, and make informed decisions about future investments and strategies.