Statement Of Comprehensive Income

Question 1

Statement Of Comprehensive Income

Answer 1

Shows the trading position of the business which is used to calculate gross profit

It then takes into account all other expenses to calculate the profit or loss for the year

First part of the statement of comprehensive income is made up of: sales revenue, costs of goods sold and gross profit

Question 2

Sales Revenue

Answer 2

The money coming into the business from providing a trade e.g. selling goods

Question 3

Sales Revenue Equation

Answer 3

Sales Revenue = Quantity Sold x Selling Price

Question 4

Cost Of Goods Sold

Answer 4

Costs directly linked to providing that trade e.g. the cost of buying in the goods or the raw materials

This is the actual value of money used to generate sales

Question 5

Cost Of Goods Sold Equation

Answer 5

Cost Of Goods Sold = Opening Inventories + Purchases - Closing Inventories

Question 6

Opening Inventories

Answer 6

The value of inventory in a business at the start of a financial year

Question 7

Closing Inventories

Answer 7

The value of inventory at the end of a financial year

Question 8

Gross Profit

Answer 8

The amount of money left or the surplus after the cost of goods sold has been deducted from the sales turnover

This is not the businesses final profit as there are still other expenses to deduct in the next part of the account

Question 9

Gross Profit Equation

Answer 9

Gross Profit = Sales Revenue - Cost Of Goods Sold

Question 10

Profit Or Loss For The Year

Answer 10

Profit is the money after all other expenses have been deducted from gross profit and any other revenue income has been added

Revenue income is non-capital income received by the business from sources other than sales e.g. discounts received and interest on positive bank balances

Question 11

Profit Or Loss For The Year Equation

Answer 11

Profit (Year) = Gross Profit - Expenses + Other Revenue Income

Question 12

Profit After Tax

Answer 12

Tax is to be deducted from the profit

This is a percentage of the profit that is to be paid to HMRC, this then gives profit after tax

This profit can be used to issue a proportion of it to shareholders in the form of dividends

Some will be put back into the company as retained profit, and retained profits are transferred from the statement of comprehensive income to the statement of financial position