WorksheetsIncome Statements
Total questions: 12
Worksheet time: 6mins
What is the purpose of an income statement?
manage assets and liabilities
calculate income for employees
calculate expenses owing
calculate revenue, cost of goods sold and expenses
How is an increase in the provision of depreciation treated?
Debit entry; additional revenue
Credit entry; balance sheet
Credit entry; expenses
Debit entry; expenses
Depreciation is calculated using two methods. Identify them
Straight line
Provision for depreciation
Reducing line
Reducing balance
Accruals are expenses owing which are (a) to/from the actual expense
Discount received $1000;Rent owing $250; Rent $540 Utilities $650; Prepaid utilities $200. Calculate total expenses.
1240
2640
1640
2440
Which of the following items go in both the Income Statement and the Balance Sheet?
Prepaid insurance
Opening Inventory
Closing Inventory
Drawings
Decrease in provisions for bad debts are...
subtracted from provision for bad debts
added to gross profit
subtracted from gross profit
not recorded as the business will be unable to collect the debt
Which of the following items is NOT useful in calculating the gross profit?
Net Sales
Closing stock
Net Profit
Cost of Goods Sold
Which of the formulas are TRUE for Income Statements?
Opening stock + Purchases + Carriage inwards + Purchases Return = Cost of goods available for sale
Gross Profit + Expenses - Additional Revenue = Net Profit
Sales - Return outwards = Net Sales
Net Sales - Gross Profit = Cost of Goods Sold
Which of the following is true about the reducing balance method for provision of depreciation?
Provision for depreciation is added to gross profit
Provision percentage is multiplied by the value of the asset given
Provision percentage is multiplied by the difference of the asset net book value and provision value
Provision for depreciation is subtracted from the asset net book value over its useful life
Which of the formulas are TRUE for the Profit and Loss account?
Carriage outwards - Carriage inwards = Delivery expense cost
Rent - Prepaid Rent = Bad debt
Utilities - Accrued Utilities = Provision for Utilities expense
Asset expense - Provision for Depreciation = Provision percentage
Gross Loss and Net Loss are recorded using
negative sign before value
brackets before and after value
curly brackets before and after value
underlined loss
