(Gross Profit) Financial statements - the basics

Question 1

What is the title of an income statement?

Answer 1

Income statement for (name) for the year ended (year).

Question 2

What £ sign do the 1st 3 things on an income statement go on and what are they?

Answer 2

3rd £ sign

Revenue
Returns inwards
Net revenue

Question 3

What £ sign does the 2nd thing on an income statement go on and what is it?

Answer 3

2nd £ sign

Opening inventory

Question 4

What £ sign does the 3rd 3 things on an income statement go on and what are they?

Answer 4

1st £ sign

Purchases
Returns outwards
Carriage inwards

Question 5

What £ sign does the 4th thing on an income statement go on and what is it?

Answer 5

2nd £ sign

Net purchases

Question 6

How is net purchases calculated?

Answer 6

Purchases - returns outwards + carriage inwards.

Question 7

What £ sign does the 5th thing on an income statement go on and what is it?

Answer 7

2nd £ sign

Closing inventory

Question 8

What is done after a straight line is drawn?

Answer 8

A calculation.

Question 9

What £ sign does the 6th thing on an income statement go on and what is it?

Answer 9

3rd £ sign

Cost of sales

Question 10

How is cost of sales calculated?

Answer 10

Opening inventory + net purchases - closing inventory

Question 11

What £ sign does the 7th thing on an income statement go on and what is it?

Answer 11

3rd £ sign

Gross profit

Question 12

How is gross profit calculated?

Answer 12

Net revenue - cost of sales

Question 13

What are the first items in the 7 things listed to calculate gross profit in the income statement?

Answer 13

Revenue
Opening inventory
Purchases
Net purchases
Closing inventory
Cost of sales
Gross profit