THE PROFIT AND LOSS ACCOUNT.

.................................. refers to the final section of a Profit and loss account and shows how the net profit after interest and tax is distributed, i.e.dividends to shareholders and/or retained profit kept by the business.

• A balance sheet

• The appropriation account

• Cost of goods sold

• Retained profit

The profit and loss account shows the trading position of a business at the end of a specified accounting period.

• YES

• NO

The balance sheet shows the assets and liabilities of a business at a particular point in time.

• YES

• NO

Is there a universal method to

present the final accounts?

• YES

• NO

Internal stakeholders can use final accounts to manage the business and to aid strategic decision-making.

• YES

• NO

The profit and loss account (or the income statement) is a financial statement of a firm's trading activities over a period of time, usually one month.

• TRUE

• FALSE

Revenue is the positive difference between a firm's revenues and its costs.

• TRUE

• FALSE

............................is the inflow of money

from ordinary trading activities, e.g. cash sales, credit sales, charges/fees and royalties .

• Revenue

• Costs

...........................are the outflow

of money from a business due to its operations, e.g. wages, salaries, rent and the purchase of stock.

• profit

• costs

There are three sections to an income statement: the trading account, the profit and loss account, and the appropriation

account.

• True

• False