Effect Of Profit And Loss

Question 1

What is the definition of profit?

Answer 1

The amount by which profit is greater than expenses

Question 2

Define Loss

Answer 2

The amount by which expenses exceeds revenue

Question 3

What is Revenue

Answer 3

Amount charged to customers for goods purchased

Question 4

What is an expense ?

Answer 4

Assets used up to provide goods or services

Question 5

True of false : Assets are credit entries in the double entry

Answer 5

False
They are debit entries

Question 6

True or False: Revenue is a credit entry

Answer 6

True

Question 7

Does revenue increase or decrease profit

Answer 7

Revenue increases profits

Question 8

What are drawings defines as?

Answer 8

Goods or cash taken out of the business by the owner for personal use.

Question 9

What effect do drawing have on your accounts?

Answer 9

Drawings reduce capital

Question 10

Outline how drawings would be written in your accounts

Answer 10

Credit - bank
Debit - drawings account

Question 11

There are only a few instances in which your purchase account can be credited’
Name one example of an instance where your purchase account can be credited

Answer 11

When drawings are taken out by business owners

Question 12

What is a journal entry?

Answer 12

Narrative of writing out transactions