FINFIT KIT SET 1

what does the statement of profit or loss (SOPOL) show ?

• assets and liabilities

• revenues and expenses

• cash flows

• owner's equity

Answer explanation

the statement of profit or loss (SOPOL) shows how much money a company earned (revenues) and spent (expenses) over a period, resulting in either a profit or loss.

which of the following is recorded in statement of profit or loss (SOPOL)

• revenue

• capital

• inventory

• assets

Answer explanation

Revenue is recorded in the statement of profit or loss (SOPOL) as it represents the income generated from normal business operations. Capital, inventory, and assets are not recorded in SOPOL.

what is the primary purpose of the statement of profit or loss (SOPOL) ?

• to show the company's financial position

• to show cash inflows and outflows

• to report profit or loss over a period

• to present the company's assets

Answer explanation

The primary purpose of the statement of profit or loss (SOPOL) is to report profit or loss over a period, summarizing revenues and expenses to show the company's financial performance.

which item is typically found at the top of the Statement of Profit or Loss (SOPOL) ?

• equity

• revenue

• expenses

• net profit

Answer explanation

The statement of profit or loss (SOPOL) typically starts with 'revenue', which represents the total income generated from sales before any expenses are deducted. 'Sales' is often used interchangeably, but 'revenue' is the more formal term.

which if the following is subtracted from revenue to calculate gross profit ?​ (a)  

• cost of sales

• depreciation

• net profit

• operating expenses

Answer explanation

To calculate gross profit, you subtract the cost of sales from revenue. This represents the direct costs attributable to the production of goods sold, making 'cost of sales' the correct choice.

where is depreciation recorded in the statement of profit or loss (SOPOL) ?

• expenses

• revenues

• cost of sales

• gross profit

Answer explanation

Depreciation is recorded as an operating expense in the statement of profit or loss (SOPOL) because it reflects the allocation of the cost of tangible assets over their useful lives, impacting overall profitability.

how is net profit calculated ?

• revenue - expenses

• revenue - cost of goods sold

• gross profit - total expenses

• assets - liabilities

Answer explanation

Net profit is calculated by subtracting total expenses from gross profit. Gross profit is derived from revenue minus the cost of goods sold, making the correct choice 'gross profit - total expenses'.

what is the net profit if revenue is RM100,000 and total expenses are RM70,000

• RM30,000

• RM3,000

• RM300,000

• RM14,000

Answer explanation

Net profit is calculated by subtracting total expenses from revenue. Here, RM100,000 (revenue) - RM70,000 (expenses) equals RM30,000. Therefore, the correct answer is RM30,000.

how do you calculate the cost of goods sold (COGS) from the following information :

opening inventory : RM10,000

purchases : RM50,000

closing inventory : RM12,000

• opening inventory + purchases

• opening inventory + purchases - closing inventory

• opening inventory + closing inventory - purchases

Answer explanation

To calculate COGS, use the formula: opening inventory + purchases - closing inventory. Here, it is RM10,000 + RM50,000 - RM12,000, which gives the correct answer. Thus, the correct choice is opening inventory + purchases - closing inventory.

if a company's gross profit is RM40,000 and expenses are RM15,000 , what is the profit ? ​ (a)   ​ (b)   ​ (c)   ​ =​ (d)  

• RM40,000
• RM400,000
• -
• +
• RM15,000
• RM150,000
• RM550,000
• RM25,000