Gr 12 Math Lit: Ch 1.4 Income, Expenditure, Profit and Loss

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What is the primary purpose of an income-and-expenditure statement?

To summarize all income received and expenses incurred over a specific period (correct)

To display data for two different periods for comparison

To estimate expected income and expenses for a future period

To outline a yearly plan for spending money to achieve goals

What is a characteristic of a budget?

It shows all actual incomes and expenditures

It is based on past income-and-expenditure statements and future needs (correct)

It provides a summary of actual income and expenses over a given period

It displays data for two different periods for comparison

What is the primary purpose of a budget?

To provide a summary of actual income and expenses over a given period

To identify variances and make adjustments

To estimate expected income and expenses for a future period (correct)

To display data for two different periods for comparison

What is a characteristic of start-up costs?

One-time expenses like equipment and furniture Signup and view all the answers

What is a purpose of preparing income-and-expenditure statements and budgets for small businesses?

To compare actual income and expenses against the budget to identify variances and make adjustments Signup and view all the answers

What is a characteristic of monthly operating costs?

Recurring expenses such as rent, loan repayments, and utilities Signup and view all the answers

What is a purpose of analysing income-and-expenditure statements and budgets for larger organizations?

To understand and analyse broad categories and trends Signup and view all the answers

What is a key feature of an income-and-expenditure statement?

It provides a summary of actual income and expenses over a given period Signup and view all the answers

What is the break-even point in a business?

The point where income equals total costs Signup and view all the answers

What is the main source of income for a business?

Sales of goods or services Signup and view all the answers

What is the purpose of a budget in a small business?

To estimate expected costs and plan for future expenses Signup and view all the answers

What is the formula to calculate profit?

Total Income - Total Expenditure Signup and view all the answers

What is a loss in a business?

When total expenditure exceeds total income Signup and view all the answers

What is the primary purpose of an income-and-expenditure statement?

To report actual expenditure and income Signup and view all the answers

What is an example of an occasional cost in a business?

Insurance premiums Signup and view all the answers

Why is managing income and expenditure important for a business?

For effective financial planning and resource allocation Signup and view all the answers

What is the main difference between fixed costs and variable costs?

Fixed costs remain the same, while variable costs change with the level of production or sales. Signup and view all the answers

What is the purpose of categorizing expenditure into fixed, variable, and occasional costs?

To identify areas where costs can be reduced or optimized. Signup and view all the answers

What is the result when total income exceeds total expenditure?

A profit is made. Signup and view all the answers

Why is it essential to manage income and expenditure effectively?

To ensure long-term financial sustainability and make informed decisions. Signup and view all the answers

What is the purpose of an income-and-expenditure statement in a small business?

To report actual income and expenditure. Signup and view all the answers

What is a characteristic of production costs?

They include day-to-day expenses incurred in producing goods or services. Signup and view all the answers

What is the formula to calculate a loss in a business?

Loss = Total Expenditure - Total Income. Signup and view all the answers

What is the significance of the break-even point in a business?

It is the point at which the business neither makes a profit nor incurs a loss. Signup and view all the answers

What is the primary difference between an income-and-expenditure statement and a budget?

A budget is a yearly plan, while an income-and-expenditure statement is a summary of actual income and expenses. Signup and view all the answers

Why is it important to divide a budget into key areas of expenditure?

To allocate resources effectively and make informed financial decisions. Signup and view all the answers

What is the purpose of comparing actual income and expenses with the budget?

To identify variances and make adjustments to the business's financial plan. Signup and view all the answers

What is the difference between start-up costs and monthly operating costs?

Start-up costs are one-time expenses, while monthly operating costs are recurring expenses. Signup and view all the answers

What is the purpose of preparing income-and-expenditure statements and budgets for small businesses?

To make informed financial decisions and guide financial planning. Signup and view all the answers

What is the advantage of including deficit spending in a budget?

It allows the business to finance its spending plans, even if it does not have enough money. Signup and view all the answers

Why do income-and-expenditure statements display data for two different periods?

To compare the business's performance over time. Signup and view all the answers

What is the purpose of understanding and analyzing income-and-expenditure statements and budgets for larger organizations?

To understand and analyze broad categories and trends. Signup and view all the answers

What is the primary aim of analyzing income-and-expenditure statements and budgets for small businesses?

To compare actual income and expenses against the budget Signup and view all the answers

How do income-and-expenditure statements typically display financial values?

In thousands, but representing millions Signup and view all the answers

What is a key feature of deficit spending in a budget?

It needs to be financed by loans Signup and view all the answers

What is the primary purpose of dividing a budget into key areas of expenditure?

To guide financial decisions and allocate resources effectively Signup and view all the answers

What is the primary advantage of preparing income-and-expenditure statements and budgets for small businesses?

It provides a clear picture of financial performance and guides financial decisions Signup and view all the answers

What is the primary purpose of comparing actual income and expenses with the budget?

To make adjustments and ensure that spending aligns with income Signup and view all the answers

What is a characteristic of income-and-expenditure statements in larger organizations?

They focus on broad categories and trends, rather than detailed expenses Signup and view all the answers

What is a key difference between an income-and-expenditure statement and a budget?

An income-and-expenditure statement summarizes actual income and expenses, while a budget estimates expected income and expenses Signup and view all the answers

Which of the following statements is true about the calculation of profit and loss?

Profit is calculated as the total income minus the total expenditure, and loss is calculated as the total income plus the total expenditure. Signup and view all the answers

What is the primary purpose of categorizing expenditure into fixed, variable, and occasional costs?

To allocate resources efficiently and make informed financial decisions. Signup and view all the answers

What is the result when total expenditure exceeds total income?

The business incurs a loss. Signup and view all the answers

Why is it essential to manage income and expenditure effectively in a business?

To ensure the long-term success and financial sustainability of a business. Signup and view all the answers

What is the main difference between an income-and-expenditure statement and a budget?

A budget estimates expected costs, while an income-and-expenditure statement reports actual expenditure and income. Signup and view all the answers

What is the primary purpose of financial planning in a business?

To ensure the long-term success and financial sustainability of a business. Signup and view all the answers

What is the significance of the break-even point in a business?

It is the point at which the business neither makes a profit nor incurs a loss. Signup and view all the answers

Why is it important to analyze income-and-expenditure statements and budgets for small businesses?

To make informed financial decisions and ensure the long-term success of a business. Signup and view all the answers

Gr 12 Math Lit: Ch 1.4 Income, Expenditure, Profit and Loss

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Questions and Answers

What is the primary purpose of an income-and-expenditure statement?

What is a characteristic of a budget?

What is the primary purpose of a budget?

What is a characteristic of start-up costs?

What is a purpose of preparing income-and-expenditure statements and budgets for small businesses?

What is a characteristic of monthly operating costs?

What is a purpose of analysing income-and-expenditure statements and budgets for larger organizations?

What is a key feature of an income-and-expenditure statement?

What is the break-even point in a business?

What is the main source of income for a business?

What is the purpose of a budget in a small business?

What is the formula to calculate profit?

What is a loss in a business?

What is the primary purpose of an income-and-expenditure statement?

What is an example of an occasional cost in a business?

Why is managing income and expenditure important for a business?

What is the main difference between fixed costs and variable costs?

What is the purpose of categorizing expenditure into fixed, variable, and occasional costs?

What is the result when total income exceeds total expenditure?

Why is it essential to manage income and expenditure effectively?

What is the purpose of an income-and-expenditure statement in a small business?

What is a characteristic of production costs?

What is the formula to calculate a loss in a business?

What is the significance of the break-even point in a business?

What is the primary difference between an income-and-expenditure statement and a budget?

Why is it important to divide a budget into key areas of expenditure?

What is the purpose of comparing actual income and expenses with the budget?

What is the difference between start-up costs and monthly operating costs?

What is the purpose of preparing income-and-expenditure statements and budgets for small businesses?

What is the advantage of including deficit spending in a budget?

Why do income-and-expenditure statements display data for two different periods?

What is the purpose of understanding and analyzing income-and-expenditure statements and budgets for larger organizations?

What is the primary aim of analyzing income-and-expenditure statements and budgets for small businesses?

How do income-and-expenditure statements typically display financial values?

What is a key feature of deficit spending in a budget?

What is the primary purpose of dividing a budget into key areas of expenditure?

What is the primary advantage of preparing income-and-expenditure statements and budgets for small businesses?

What is the primary purpose of comparing actual income and expenses with the budget?

What is a characteristic of income-and-expenditure statements in larger organizations?

What is a key difference between an income-and-expenditure statement and a budget?

Which of the following statements is true about the calculation of profit and loss?

What is the primary purpose of categorizing expenditure into fixed, variable, and occasional costs?

What is the result when total expenditure exceeds total income?

Why is it essential to manage income and expenditure effectively in a business?

What is the main difference between an income-and-expenditure statement and a budget?

What is the primary purpose of financial planning in a business?

What is the significance of the break-even point in a business?

Why is it important to analyze income-and-expenditure statements and budgets for small businesses?

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