Trading and Profit and Loss Account

The account which discloses the gross profit or loss

is called the

• Profit and Loss A/c

• Appropriation A/c

• Trading A/c

• Cash A/c

In the trading account, returns outwards is deducted

from

• Carriage outwards

• Carriage inwards

• Purchases

• Sales

Which of the following are ALL components of the Income statement?

• Net sales, Cost of sales, Net profit

• Non-current liabilities, Capital, Expenses

• Net current assets, Gross profit, Cost of sales

• Gross profit, Current assets, Current liabilities

Which of the following is NOT considered to be an outflow?

• Rent

• Sales

• Utilities

• Wages and salaries

Which of the following can be found on both the income statement and on the balance sheet?

• Drawings

• Net profit

• Bank overdraft

• Accounts receivables

Carriage inwards is charged to the Trading Account because:

• it is not not a balance sheet item

• it is not part of our motor expenses

• return inwards also goes in the trading account

• it is basically part of the cost of buying goods

Net Profit is

• Sales less puchases add opening stock less closing stock

• Gross profit add expenses of the period

• Capital plus all expenses

• Gross profit less expenses of the period

On January 1, a trader bought 100 articles at $5

each. During the month, 70 of the articles were sold

at $8 each and the remainder were sold on January

31 at the market value of $3 each. What was the

gross profit for the month.

• $150

• $190

• $210

• $300

The gross profit of a firm is $3 600, bad debts $100,

rent paid $120, rent prepaid $20, general expenses

$80 and discount received $110. The net profit is

• $3 400

• $3 410

• $3 430

• $3 710

Sales $36 000

Purchases $22000

Gross Profit $11000

Closing Stock $6000

Sales Returns $1000

Opening Stock $8000

What is cost of goods sold ?

• $ 7 000

• $ 9 000

• $24 000

• $30 000