3. Preparation of Financial Statements

Income Statement — Quiz

Test your understanding of income statement with 5 practice questions.

Practice Questions

Question 1

If a company has sales of $500,000$ and COGS of $300,000$, what is the Gross Profit?

Question 2

Which of the following is included in the calculation of Net Profit?

Question 3

A business has the following figures: Revenue $250,000$, Cost of Goods Sold $150,000$, Operating Expenses $50,000$. What is the Net Profit?

Question 4

What is the primary purpose of the 'Profit and Loss Account'?

Question 5

Which of the following would be classified as a direct expense in the Trading Account?