Statement of profit or loss Definitions Flashcards
What is a Statement of profit or loss?
This summarises the effects of trading (the income and expenses), and shows the financial performance of the business for a given time period, usually the last twelve months.
What is Sales revenue?
This is income generated from the trading activities of a business.
What is the Cost of sales?
The cost of buying or producing the goods for resale.
What is Gross profit?
The excess of sales revenue over cost of sales.
What is Sundry income?
This is where other types of income are not generated by primary trading activities.
What are expenses?
These are the day-to-day running costs of the business.
What is Net profit (or loss)?
The profit (or loss) remaining after all expenses have been deducted.
What is Capital expenditure?
The purchase of (or improvement in value of) non-current assets (assets that are used long-term and not part of trading activities).
What is Revenue expenditure?
This is the day-to-day running costs of the business.
What is Capital income?
This is the income generated from the sale of capital (non-current) assets of the business.
What is Revenue income?
This is the income generated from the sale of goods or services.
What is the difference between Capital expenditure/income and Revenue expenditure/income?
Capital expenditure/income are one-off business activities (not done daily), whereas Revenue expenditure/income are done within the daily activities of the business.
