Business revision 23/11/2020

Question 1

what is the equation for depreciation (straight line method)

Answer 1

expected lifespan of asset

Question 2

what is the equation for cost of goods sold

Answer 2

opening stock + purchases - closing stock

Question 3

what is the equation for depreciation (reducing balance method)

Answer 3

purchase cost x depreciation rate

Question 4

what is the equation for expenses

Answer 4

net profit - gross profit

Question 5

what is the equation for gross profit

Answer 5

total sales revenue - cost of goods sold

Question 6

what is the equation for net assets

Answer 6

fixed assets + working capital - long term liabilities

Question 7

what is the equation for net profit

Answer 7

growth profit - expenses

Question 8

what is the equation for equity (owners’ equity)

Answer 8

total assets - total liabilities

Question 9

what is the equation for retained profit

Answer 9

net profit after interest and tax - dividends

Question 10

what is the equation for total assets

Answer 10

fixed assets + current assets

Question 11

what is the equation for total liabilities

Answer 11

current liabilities + long term liabilities

Question 12

what is the equation for working capital (net current assets)

Answer 12

current assets - current liabilities

Question 13

what is the equation for sales revenue

Answer 13

price x quantity

Question 14

what is the equation for profit

Answer 14

sales revenue - total costs

Question 15

what is the equation for net cash flow

Answer 15

cash inflows - cash outflows

Question 16

what is the definiton of cash

Answer 16

it is the money an organization has either at its premises and/or the bank (in its bank account) they use this money to buy inventory, stock etc