Week 14 summary sheet questions

What is the main reason most businesses want to make a profit?

• To cover the cost of sales

• To pay finance costs

• It is the main reason they start a business

• To calculate gross profit

What does the statement of comprehensive income show?

• The business's marketing strategies

• The income and costs for a business to calculate profit

• The amount of finance income a business has

• The total administrative expenses only

What are 'cost of sales'?

• The expenses incurred from marketing and advertising

• The direct costs of producing the good or service

• The general overheads like office salaries and stationery

• The profit generated from the firm's main activities

What does 'gross profit' represent?

• Total revenue minus operating profit

• Revenue minus cost of sales

• Total administrative and selling expenses

• Finance costs minus finance income

What are 'administrative expenses'?

• Costs related to the sales of products

• The direct costs of producing goods or services

• General overheads such as office salaries, stationery, etc.

• Income not generated by the business's primary operations

What is 'operating profit'?

• Gross profit plus other income

• Gross profit minus expenses

• Revenue minus cost of sales

• Total revenue minus finance costs

What is 'other income' in the context of business finance?

• Income from the business's primary operations

• Income generated by the business's main activities

• Income not generated by the business's primary operations

• The direct costs of producing goods or services

What are 'finance costs'?

• The costs of goods sold

• The overheads like office salaries and stationery

• The interest paid to the lender if a business borrows money

• The profit generated from the firm's main activities

What is the current corporation tax rate for Ltds and PLCs on profits over £250,000?

• 20%

• 25%

• 30%

• 35%

What is meant by 'retained profit' in a business context?

• The share of the profit distributed to shareholders as dividends

• The share of the profit used to pay corporation tax

• The share of the profit kept in the business to fund future developments

• The total profit of the business before tax