Finance — profit & loss
AQA GCSE Business Studies revision on Finance — profit & loss. Aligned to the AQA GCSE Business 8132 specification. This bank has 10 practice questions on this topic.
Sample questions (3 of 10)
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Question 1
Which of the following describes the formula for calculating gross profit?
- A) Revenue minus total costs
- B) Revenue minus cost of sales
- C) Gross profit minus expenses
- D) Revenue plus other income
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Answer: Revenue minus cost of sales
Gross profit is calculated by subtracting the direct costs of producing goods or services, known as the cost of sales, from the total revenue. This figure helps businesses understand the efficiency of their production process before considering administrative or fixed costs.
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Question 2
A business has revenue of 50000 pounds, cost of sales of 20000 pounds, and expenses of 15000 pounds. What is the gross profit?
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Answer: 30000
To find gross profit, you take the revenue of 50000 and subtract the cost of sales of 20000. Operating expenses are only deducted later when calculating net or operating profit, so they are not included in this specific calculation.
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Question 3
Which of these is considered an operating expense on a profit and loss account?
- A) Raw materials
- B) Direct labour
- C) Rent and rates
- D) Stock purchases
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Answer: Rent and rates
Rent, rates, and utilities are overheads that must be paid regardless of how many units are produced. Unlike raw materials or direct labour, these are indirect costs and are deducted from gross profit to reach the operating profit figure.
Want to test yourself on the remaining cards for this topic?
7 more questions on Finance — profit & loss — plus mistakes tracking and spaced repetition across the whole Business Studies spec.