Chapter 8 & 9 Income statement and SOFP

Gross profit is calculated by... (choose all the correct answers)

• Revenue - cost of sales

• Revenue + cost of ales

• Selling price of goods - cost of sales

• Selling price of goods + cost of sales

Cost of sales is calculated by...

• Opening inventory + purchases - closing inventory

• Opening inventory + purchases + closing inventory

• Adding up all of the inventory bought during the year

• Opening inventory - closing inventory

How do you calculate net profit (profit for the year) ? (choose all the correct answers)

• Revenue - cost of sales + other income - other expenses

• Gross profit + other income - other expenses

• Gross profit - revenue

• Revenue - net purchases

Examples may include salaries, utilities, rent, insurance, and office supplies.

• Revenue
• Expense
• Net Income
• Net Loss

Revenue = 1000

Cost of Sales = 200

Expenses = 300

Gross Profit = ?

• 800

• 500

• 700

• 300

Revenue = 1000

Cost of Sales = 200

Expenses = 300

Net Profit = ?

• 800

• 500

• 700

• 300

Net Profit = 500

Revenue = 2000

Expenses = 1000

Cost of Sales = ?

• 1500

• 1000

• 3000

• 500

Which of the following is not a type of income?

• Sales

• Commission

• Service Fee

• Rent paid

An expense is...

• money a business spends on the general operation of business

• money the business owes to other organisations and people

• money owed to the Business

• None of the above

An income statement is

• A way of listing sales, cost of goods sold and expenses.

• Another word for 'Gross Profit'

• Same as the statement of financial position

• None of the above.