Final accounts

What does the trading account gives details of?

• Overheads and other costs of production

• The cost of goods sold

• The current value of the organization

• The net profit(or loss)during a trading period

If expenses are greater than gross profit for a business, then the business

• Can distribute a portion of the profits to shareholders

• Has a positive net profit balance

• Has made an overall loss

• Has performed well on financial grounds

In which account would overheads and expenses appear?

• Appropriation account

• Balance sheet

• Profit and loss account

• Trading account

Which of the following items does not appear in a profit and loss account?

• Cost of goods sold

• Expenses

• Machinery and equipment

• Overheads

On a profit and loss account, dividends represent

• The numerical difference between retained profit and expenses

• The numerical difference between tax and interest payments

• The portion of net profits after interest and tax that is distributed to shareholders

• The portion of net profits that is reinvested by the business

Which of the following cannot be applied to gross profit

• Appears on the trading account

• Calculated as sales revenue minus the cost of goods sold

• Calculated by total revenue minus the cost of sales

• Expressed as a percentage to allow for historical and inter-firm comparison

Expenses are the

• Costs of non-trading activities

• Direct costs of trading activities

• Direct costs of non-trading activities

• Indirect costs of trading activities

A firm can increase its gross profit by

• All of the below

• Cutting advertising expenditure

• Reducing management salaries

• Using cheaper suppliers

Money owed to other people or organizations is shown in a balance sheet as

• Current liabilities

• Debts

• Liabilities

• Net assets

Which of the following does not usually apply to fixed assets

• Assets owned by a business for more than 12 months

• Assets that a business intends to keep for more than 12 months

• Assets that generate cash sales for a firm

• Intangible assets such as brands, logos, and slogans