Financial Statement

Question 1

Turnover

Answer 1

Total revenue

Question 2

Cost of sales (direct costs)

Answer 2

Costs that are involved in directly marketing a product (direct costs) and would include raw materials and wages

Question 3

Expenses

Answer 3

Other expenses a business has to pay and are known as indirect costs
(Bills, fuel costs, advertising, rent, insurance, loan repayments, salaries)

Question 4

Gross profit

Answer 4

Profit a business makes before taking into account other expenses (indirect costs)

Question 5

Net profit

Answer 5

Profit a business earns when all expenses have been deducted

Question 6

Costs of sales (direct costs or costs of goods)

Answer 6

Costs directly associated with what the business sells or makes
(Stock, raw materials, packaging, wages)