income statement

Question 1

what are the two ways to calculate how much profit a business has made?

Answer 1

selling price - cost price = profit

total revenue - total costs = profit

Question 2

what will the amount of profit a busienss has depend on?

Answer 2

• the level of sales revenue
• the size of the mark up ( the extra added cost of the product to give the selling price)
• the control of costs ( ie keeping costs ot a minimum)

Question 3

how can a business make a loss?

Answer 3

if:
-sales are low
- raw mareriald are expensive
-expensises are to high

Question 4

what will a business create at the end of the trading year to show how much profit has been generated?

Answer 4

an income statement

Question 5

what is the purpose of an incone statement?

Answer 5

to calculate profit

Question 6

what are the 2 types of profit that can be calculated from an income statemnet?

Answer 6

gross profit

profit for the year

Question 7

what is gross profit?

Answer 7

the profit of buying and selling the inventory

Question 8

what is profit for the year?

Answer 8

the final profit for the business beofre tax is deducted

Question 9

how to calculate gross profit?

Answer 9

sales revenue-cost of sales

Question 10

how to calculate profit for the year?

Answer 10

gorss profit - expenses