Income Statements & Finance Revision.

Which one is not an expense?

• raw materials
• production costs
• commission received
• insurance

Deficit means

• you have more revenue
• you have more money out than money in
• you are in the black
• you are in debit

Which document would you give to someone who still owes money?

• a receipt
• an invoice
• a cheque
• a credit note

what is the purpose of an income statement?

• calculate the bank balance
• calculate net assets
• calculate sales
• calculate net profit

How do you calculate gross profit?

• Sales - COGS
• Sales - NP
• COGS - Expenses
• COGS - NP

Estimating or predicting your sales and costs can be limiting becuase

• estimates are not based on anything
• estimates are not used in business
• estimates can change over time
• estimates are not productive

Define economies of scale.

• you save money on buying bulk
•  with cost per unit of output generally decreasing with increasing scale
• the balance of the scales are equal
• total costs are spread evenly

How could a business improve net profit?

• reduce expenses
• increase COGS
• reduce sales
• increase expenses

A Net Profit occurs if:

• Gross Profit is greater than expenses
• Expenses greater than Gross Profit
• None of the listed choices

The Financial year is 1st January - 31st December

• True
• False