Cost of sales are...

• The cost of producing a product, otherwise called direct costs

• Other costs that are not related to producing the product, otherwise known as indirect costs

• Cost that do not change with output

• Running costs

Expenses are...

• The cost of producing a product, otherwise called direct costs

• Other costs that are not related to producing the product, otherwise known as indirect costs

• Cost that do not change with output

• Running costs

Which of the following costs would be counted in cost of stales?

• Rent

• Materials

• Tax

• Wages

Which of the following costs would be considered as expenses?

• Rent

• Utility bills

• Materials

• Tax

Expenses can be referred to as 'Overheads'.

• True

• False

Which of the following formula is correct for working out net profit?

• = price x units (output or Sales)

• = revenue – cost of sales

• = gross profit - expenditure

• = Fixed costs + variable costs

Which of the following formula is correct for working out gross profit?

• = price x units (output or Sales)

• = revenue – cost of sales

• = gross profit - expenditure

• = Fixed costs + variable costs

Which of the following formula is correct for working out sales revenue?

• = price x units (output or Sales)

• = revenue – cost of sales

• = gross profit - expenditure

• = Fixed costs + variable costs

Which three lines of the profit and loss account would make up the trading account?

• Sales Revenue, Cost of Sales and Gross Profit

• Sales Revenue, Expenses and Gross Profit

• Sales Revenue, Cost of Sales and Net Profit

• Net Profit, Cost of Sales and Gross Profit

Using this profit and loss account, complete the answer for Gross Profit.

• £11,000

• £10,000

• £30,000

• £35,000