Statement of Comprehensive Income Flashcards
Statement of Comprehensive Income Definition
Shows the trading position of the business which is used to calculate gross profit. It then takes into account all of the expenses to calculate the profit or loss for the year
Accrual Definition
When an expense is paid after the period to which it relates to
Prepayment Definition
When an expense is made in advance of the period to which it relates to
Sales Revenue Definition
The money a business earns from selling products or services to customers
Gross Profit Definition
The direct profit made from selling goods after deducting the costs associated with making the product
Net Profit Definition
What is left after all the costs of a business have been taken from its sales revenue
Cost of Goods Sold Definition
Expenses reported in a company’s income statement along with all other revenues and expenses for the period
Gross Profit Margin Definition
The percentage of sales revenue that is left once the cost of sales has been paid
Net Profit Margin Definition
The proportion of sales revenue that is left once all costs have been paid
Sales Revenue Formula
Unit Price * Quantity Sold
Gross Profit Formula
Sales Revenue - Cost of Goods Sold
Cost of Goods Sold Formula
(Opening inventory + Purchases) - Closing inventory
Net Profit or Profit/Loss for the year Formula
(Gross Profit - Expenses) + Other Income
Gross Profit Margin Formula
Gross Profit/ Sales Revenue * 100
Net Profit Margin Formula
Net Profit/ Sales Revenue * 100
