Statement Of Profit And Loss (trading Account) Flashcards
1
Q
What is the formula for gross profit?
A
Gross profit = sales revenue - cost of sales.
2
Q
What is the formula for net profit?
A
Net profit = gross profit - expenses
3
Q
What is the formula for sales revenue balance?
A
Sales revenue - returns inwards
4
Q
What is the formula for cost of sales balance?
A
Opening inventory + purchases - closing inventory
5
Q
What do expenses consist of?
A
- Salaries
- Electricity
- Rent
- Carriage outwards
- Discounts allowed
6
Q
What is discount received a part of?
A
Gross Profit
