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WorksheetsChapt 21 - Income Statement Practice 2 (exam further)
Total questions: 20
Worksheet time: 10mins
A business has the following financial information: - Revenue: $120,000 - Cost of Sales: $60,000 - Expenses: $30,000 What is the Net Profit? (1 mark)
$60,000
$30,000
$90,000
$15,000
A company earned $500,000 in revenue and incurred the following: - Cost of Sales: $250,000 - Operating Expenses: $120,000 - Interest Paid: $10,000 What is the Net Profit Before Tax? (1 mark)
$120,000
$130,000
$250,000
$370,000
A business reports the following: - Revenue: $80,000 - Cost of Sales: $30,000 - Expenses: $20,000 - Tax Rate: 25% What is the Profit After Tax? (1 mark)
$22,500
$30,000
$40,000
$37,500
A company’s retained profit is calculated as follows: - Net Profit After Tax: $40,000 - Dividends Paid: $10,000 What is the Retained Profit? (1 mark)
$50,000
$40,000
$30,000
$10,000
A business wants to increase its net profit. Which of the following is the most effective way? (1 mark)
Increase Cost of Sales
Reduce Expenses
Decrease Revenue
Pay more tax
A company has: - Revenue: $200,000 - Cost of Sales: $100,000 - Expenses: $50,000 - Depreciation: $10,000 - Tax Rate: 30% What is the Net Profit After Tax? (1 mark)
$40,000
$35,000
$30,000
$28,000
Which stakeholder would be MOST interested in an income statement to check if a company can repay a loan? (1 mark)
Employees
Lenders
Suppliers
Customers
If a company’s net profit before tax is $120,000 and it has a 20% tax rate, what is its profit after tax? (1 mark)
$24,000
$100,000
$96,000
$120,000
What is the main reason suppliers might check a company’s income statement? (1 mark)
To see if the company has enough profit to pay its debts
To check how much tax the company is paying
To determine how much they should charge for their products
To evaluate how much money employees are being paid
A company wants to increase its retained profit. Which of the following actions would NOT help achieve this? (1 mark)
Increase revenue
Reduce expenses
Pay more dividends to shareholders
Find ways to cut production costs
A restaurant business reports the following: - Revenue: $250,000 - Cost of Sales: $120,000 - Operating Expenses: $80,000 - Interest Paid on a Loan: $10,000 - Tax Rate: 25% What is the Profit After Tax? (1 mark)
$40,000
$30,000
$25,000
$35,000
A company wants to increase its Gross Profit. Which of the following would be the MOST effective way? (1 mark)
Increase selling price while keeping costs constant
Increase advertising expenses
Take out a loan to expand operations
Pay higher wages to employees
A company has the following financial details: - Revenue: $400,000 - Cost of Sales: $200,000 - Expenses: $100,000 - Depreciation: $20,000 - Dividends Paid: $30,000 What is the Retained Profit before tax is deducted? (1 mark)
$80,000
$100,000
$70,000
$50,000
A business’s net profit increased significantly, but its cash balance remains low. What is the MOST likely reason for this? (1 mark)
The business is holding too much stock
The business paid off a loan early
The business is offering customers credit sales
The business is spending too much on marketing
A company reduced its cost of sales by switching to cheaper materials. However, its net profit decreased. What is the MOST likely reason? (1 mark)
Customers stopped buying due to lower product quality
The company paid more dividends
The business increased revenue at the same time
Loan repayments increased
A business had the following details: - Gross Profit: $150,000 - Operating Expenses: $60,000 - Depreciation: $15,000 - Interest Paid: $5,000 - Tax Rate: 20% What is the Profit After Tax? (1 mark)
$56,000
$64,000
$70,000
$80,000
A supplier wants to check if a business can afford to pay for its orders. What should they look at in the income statement? (1 mark)
Gross Profit
Net Profit Before Tax
Retained Profit
Expenses
A company with high net profit but negative cash flow is most likely to be facing which problem? (1 mark)
Too many expenses
Late customer payments
Not enough revenue
Low retained profit
Which of the following changes would MOST likely increase a company’s retained profit? (1 mark)
Paying higher dividends
Reducing operating expenses
Increasing tax payments
Raising employee salaries
A business made a net profit of $200,000 and paid $40,000 in dividends. What would happen if it paid $60,000 in dividends instead? (1 mark)
Retained profit would increase by $20,000
Retained profit would decrease by $20,000
Gross profit would change
Operating expenses would increase
