WorksheetsT-level Mgt & Admin: Profit
Total questions: 20
Worksheet time: 11mins
Where is the profit or loss of a business calculated? (more than one correct answer)
Statement of financial position
Income statement
Cash flow statement
Profit and loss account
Which one of the following statements is correct?
Gross profit = revenue – cost of goods sold
Gross profit = revenue - total costs
Gross profit = revenue - other expenses
Gross profit = revenue - cost of goods sold - other expenses - tax
What is the formula for calculating net profit margin?
(Net profit - other expenses) / revenue x 100
(Net profit / revenue) x 100
Revenue - other expenses
Revenue - cost of goods sold - other expenses - tax
Which statement is true in relation to gross profit and net profit
Gross profit is less than net profit because it is calculated by deducting only cost of goods sold from revenue
Gross profit is the same as net profit
Gross profit is greater than net profit because it is calculated by deducting tax from revenue
Gross profit is greater than net profit because it is calculated by deducting only cost of goods sold from revenue
What is the formula for calculating net profit?
Revenue - cost of goods sold
Revenue – (cost of goods sold + expenses)
Revenue - (cost of goods sold - corporation tax)
Revenue + (cost of goods sold - expenses)
Which of the statements below is correct in relation to gross profit and gross profit margin?
Gross profit is a ratio (i.e. %) and gross profit margin is a value.
Gross profit is the same as gross profit margin
Gross profit is a value and gross profit margin is less than gross profit
Gross profit is a value and gross profit margin is a ratio (i.e. %)
Which of the following are examples of costs that would be categorised as “cost of goods sold”
(multiple correct answers)
Raw materials
Direct labour costs
Tax
Direct factory overheads
Which of the following statements is most correct?
The accounting period is always annual (i.e. 12 months)
The accounting period is a specific time-period for which an organisation prepares its financial statements
The accounting period is a specific time-period for which an organisation pays its shareholders
The accounting period is a specific time-period when companies are required to submit tax returns
Which of the following statements is true of indirect costs? (more than one correct answer)
Change in line with production
Are incurred whether or not the business produces and/or sells
Do not change in line with production
Are incurred only if a business is producing and/or selling products and/or services
Corporation tax is calculated on:
Gross profit
Net profit after tax
Net profit before tax
Gross profit before tax
To calculate the value of stock for cost of goods sold (COGS) you start with opening stock, add ___ to get total stock available and then deduct ____.
Purchases, opening stock
Other expenses, closing stock
Purchases, other expenses
Purchases, closing stock
Examples of other expenses or indirect costs include: (more than one correct answer)
Rent
Energy
Direct factory overheads
Tax
Revenue = £100,000
Cost of goods sold = £50,000
Other expenses = £25,000
What is the gross profit?
£150,000
£50,000
£100,000
50%
Revenue = £80,000
Cost of sales = £30,000
Other expenses = £10,000
What is the total net profit?
£60,000
50%
£90,000
£40,000
Company A has the following annual costs:
Raw materials: £42,000, Electricity: £6,000
Direct factory wages: £60,000, Management salaries: £120,000
Factory overheads: £35,000, Marketing: £7,000
Its annual cost of goods sold (COGS)is:
£270,000
£137,000
£143,000
£42,000
Company B’s annual financial data is as follows:
Cost of goods sold = £50,000
Total sales revenue = £300,000
Expenses = £100,000
The gross profit margin and net profit margin for Company B are:
83.3% and 60%
83.3% and 50%
50% and 50%
50% and 60%
Barbara’s cake shop’s financial data for 2022 is as follows:
Total sales revenue: £230,000
Raw materials: £60,000
Direct wages: £40,000
Other expenses: £50,000
What is Barbara’s net profit and net profit margin for 2022?
£130,000 and 56.5%
£120,000 and 52.2%
£80,000 and 34.8%
£180,000 and 78.3%
Which of the statements below is most correct?
A fall in gross profit margin might suggest ___
that the government has increased corporation tax
That suppliers are charging higher prices
that customers are buying more of the company's product
a fall in net profit is guaranteed
Revenue = £200,000
Cost of goods sold = £160,000
Operating (other expenses) = £20,000
What is the total gross profit?
£80,000
£40,000
£180,000
£140,000
Which of the statements below is true (more than one correct answer):
Cash flow is the money left over after ALL expenses are paid
Cash flow is the net flow of money in/out of the business
Profit is the net flow of money in/out of the business
Profit is the money left over after ALL expenses are paid
