3.4 Financial Statements

Which of the following items would appear on a Balance sheet?

• Share capital

• Gross Profit

• Revenue

• Cash

Revenue - Cost of goods sold =

• Net Assets

• Gross Profit

• Net Profit

• Overhead expenses

This describes a current asset which is money owed to the business from individuals or other businesses it has extended trade credit to.

• Debtors

• Creditors

• Long-term loans

Working Capital =

• Fixed assets - current assets

• Fixed assets - Equity

• Current assets - current liabilities

• Revenue - COGS

Working Capital is an important measure of the short-term financial health of a business. If it is negative, it means that the company may not be able to to pay for day-to-day expenses.

• True

• False

At the bottom of the Profit & Loss Account, if the company has Net Profit the company generally reports two options to appropriate the income. These are:

• Pay out dividends

• Spend more on political donations

• Reinvest the profit back into the business

• Sale off assets

Select all of the following items that may appear on a Profit & Loss Account.

• Marketing Expenses

• Taxes

• Building value

• Retained Profit

Sales Revenue $2,500,000

Cost of Goods Sold $1,000,000

Expenses $75,000

Interest $10,000

Which of the following is the correct amount for Gross Profit?

• $1,500,000

• $1,425,000

• $1,415,000

• $3,500,000

Select all the items from the list below that may appear on a Balance Sheet.

• Working Capital

• Mortgages

• Gross Profit

• CEO salary

• Short-term loans - like a credit card

This term refers to any liability that the business has to pay usually within one year.

• current assets

• current liabilities

• working capital

• long-term liabilities