4, 14 Financial Statements of Sole Trader

Question 1

1.What is cost of sales?

Answer 1

The direct costs, which are usually material and labor, to make or buy a product.

Question 2

2. What is revenue returns?

Answer 2

Revenue returns are goods that have been returned by the customer, sometimes called Returns Inwards.

Question 3

3. What is purchases returns?

Answer 3

Purchases returns are goods that the business sends back to the supplier sometimes called Returns outwaard.

Question 4

4. What is carriage inwards?

Answer 4

Carriage Inwards is a cost incurred when a supplier charges for delivery on goods purchased.

Question 5

5. What is the purpose of an Income Statement?

Answer 5

The main purpose of an income statement is to allow the owners to see how profitably the business is operating.

Question 6

6. What is an income statement?

Answer 6

Income statement is a statement of all income and expense recognized during a specific period.

Question 7

7. What is a statement of financial Position?

Answer 7

Statement of Financial position shows the value of a business on a specific date, including the assets, liabilities and capital.

Question 8

8. What is patent?

Answer 8

A patent is buying the right to use another company’s invention.