CH2 - SOPL & SOFP

Question 1

Asset expenditure

Answer 1

Results in the acquisition of NCA.
number plates
Delivery costs

Question 2

Expense/revenue expenditure

Answer 2

Expense charged to profit or loss are incurred for the purpose of the trade of the business or of the maintenance of NCA.
Road Tax
Maintenance contract

Question 3

Cost of goods sold represent

Answer 3

The purchase or production costs of goods sold.

Question 4

Capital income

Answer 4

Results from the sale of non-current assets.

Profit/loss in SOPL

Question 5

Revenue income

Answer 5

Arises from the proceeds of sales of goods or rental, dividend and interest income from non-current assets.

Income in SOPL

Question 6

John has been asked to provide a copy of his final accounts to his bank manager.

What is the bank manager MOST likely to use the final accounts for?

Answer 6

To ensure that the business is able to make the repayments on a loan