Income Statement Flashcards
1
Q
What are the terms used in an income statements?
A
- Sales revenue
- Cost of sales
- Gross profit
- Expenses
- Profit for the year
2
Q
What is the definition of sales revenue?
A
The amount of money made from selling goods or services.
3
Q
What is the definition of cost of sales?
A
The amount of money spent on selling goods.
This is calculated by:
(opening inventory + purchases) - closing inventory.
4
Q
What is the definition of gross profit?
A
The profit made from buying and selling.
This is calculated by:
sales revenue - cost of sales.
5
Q
What is the definition of expenses?
A
Running costs incurred throughout the year.
6
Q
What is the definition of profit for the year?
A
The profit made after expenses are deducted from gross profit.
This is calculated by:
gross profit - expenses.
