Profit and loss Year 11 business Flashcards
1
Q
Over what period of time is a profit and loss calculated
A
Normally a year
2
Q
What is the equation for net profit
A
Gross profit minus Expenses= Net profit
3
Q
What is the equation for Gross Profit
A
Sales minus expenses
4
Q
What does ‘cost of sales’ mean
A
Normally the cost of stock
5
Q
What does revenue mean?
A
The money going into the till from sales
6
Q
Why is net profit more important than gross profit
A
Because net profit takes into account ALL the costs of the business and gross profit only takes into account the stock.
7
Q
What is the trading account
A
This is the top part of the account where gross profit is calculated
8
Q
What happens to the net profit
A
It is used to pay tax or to pay shareholders in dividends or to invest back into the business as retained profit
