Year 11 Accounting Pre-Test

A trading business earns revenue through buying and selling goods

• True

• False

A service business earns revenue through providing (a)   for a fee

Which is not a source of revenue

• Sales

• Services

• Interest

• Cost of sales

What does the Profit & Loss statement measure?

Gross profit and Net profit are both included on the Profit & Loss Statement.

• True

• False

Which is not an expense category used in a Profit & Loss Statement.

• Selling Expenses

• Administration Expenses

• Employment Expenses

• Financial Expenses

Tick the following accounts you think would be found in the Administrative Expenses section of the Profit & Loss

• Advertising

• Stationary

• Taxes

• Telephone

• Interest expense

How do you calculate Net profit?

Which is not a ratio used when analysing the profit & loss statement?

• Profitability Ratio

• Consistency Ratio

• Liquidity Ratio

• Stability Ratio

Return on Owners Equity Ratio shows how efficient the business is at making the capital invested earn profit.

• True

• False

• Return on Owners Equity is not a ratio