RECAP - MfP - Understanding Profit and Loss Statement

A Trial Balance shows the profits and losses of a business. T/F?

• True

• False

There are two sections for a Profit & Loss Statement? T/F?

• True

• False

The Profit & Loss Statement summarises the income and expenditure of a business over a Period of time. T/F?

• True

• False

Which of these do not appear in the Section 1 of P&L?

• Sales Revenue / Turnover

• Purchases

• Net Profit

• Cost of Sales

Which of these appear in the Section 2 of P&L?

• Sales Revenue / Turnover

• Closing Stock

• Cost of Sales

• Marketing

Which of the following is a primary purpose of a Trial Balance?

• To show the financial position of a business

• To ensure that debits equal credits

• To calculate net profit

• To summarise cash flow

What is typically the first item listed in the Profit & Loss Statement?

• Net Profit

• Operating Expenses

• Sales Revenue / Turnover

• Gross Profit

Which of the following is considered an operating EXPENSE in a Profit & Loss Statement?

• Cost of Sales

• Marketing

• Sales Revenue

• Net Profit

In a Profit & Loss Statement, what is subtracted from Sales Revenue to calculate Gross Profit?

• Operating Expenses

• Net Profit

• Cost of Sales

• Closing Stock

Which of the following is not typically included in a Profit & Loss Statement?

• Sales Revenue

• Net Profit

• Balance Sheet

• Operating Expenses