Accounting Quiz on Cost and Profit Concepts

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What is included in the calculation of Cost of Goods Sold for a manufacturing business?

Opening stocks of finished goods plus cost of goods manufactured minus closing stock of finished goods (correct)

Total sales minus gross profit

Total expenses incurred during the period

Opening stock of finished goods plus cost of goods purchased

In the Profit & Loss Account, where is the trading account typically located?

At the top of the P&L account (correct)

At the bottom of the P&L account

In the cash flow statement

In the notes section of the financial statements

Which of the following statements about General Operating Expenses is true?

They do not affect the calculation of gross profit.

They only involve direct labor costs.

They include marketing and administrative expenses. (correct)

They are only related to the production of goods.

What was the Gross Profit for Ardmore Limited for the year ending 31 Dec 2012?

€6,007.00 Signup and view all the answers

What does the Cost of Sales represent in the Profit & Loss Account?

The costs directly associated with producing goods sold in the period. Signup and view all the answers

What is the formula for calculating Net Cash Flow from Operating Activities?

Operating profit plus depreciation and adjustments minus movements in working capital Signup and view all the answers

An increase in stocks (inventory) affects cash flow how?

It results in an outflow of funds Signup and view all the answers

In the context of cash flow, what does a decrease in creditors indicate?

An outflow of funds Signup and view all the answers

How is payment of dividends classified in a cash flow statement?

As a cash outflow from financing activities Signup and view all the answers

Which statement is true regarding the movements in working capital?

Increase in creditors typically results in cash inflows Signup and view all the answers

What is the primary purpose of the Manufacturing Account?

To calculate the cost of goods manufactured Signup and view all the answers

Which of the following components is NOT included in the calculation of the Cost of Goods Manufactured?

Sales revenue Signup and view all the answers

How is the Cost of Raw Materials Consumed calculated?

Opening stock plus purchases minus closing stock Signup and view all the answers

Which value is deducted from the total manufacturing production cost to determine the Cost of Manufacture?

Closing work in progress Signup and view all the answers

What does the term 'Prime Cost of Manufacture' encompass?

Cost of raw materials consumed and factory wages Signup and view all the answers

What type of costs does the section for factory overheads generally include?

All costs except raw materials and direct factory costs Signup and view all the answers

What is NOT true about the Manufacturing Account?

It is required to be made public Signup and view all the answers

Which component directly affects the calculation of the Total Manufacturing/Production Cost?

Cost of raw materials consumed Signup and view all the answers

What is the main focus of tactical planning?

Current operations of various parts of the organization Signup and view all the answers

Which level of planning is primarily concerned with short-term targets?

Operational Planning Signup and view all the answers

What type of planning develops alternative plans for unexpected events?

Contingency Planning Signup and view all the answers

Which management level is involved in tactical planning?

Middle Management Signup and view all the answers

What is NOT a characteristic of strategic planning?

It is focused on immediate outcomes Signup and view all the answers

Which step is NOT part of the planning process?

Implementing the plan Signup and view all the answers

In which management level is planning considered inflexible?

Operational Level Signup and view all the answers

What is the primary role of front-line supervisors in the planning process?

Setting departmental goals and budgets Signup and view all the answers

What is included in long-term liabilities on a balance sheet?

Debentures/loan stock Signup and view all the answers

Which component of the balance sheet includes retained profits?

Equity Signup and view all the answers

In a traditional balance sheet, what does the 'Funding' section refer to?

Liabilities Signup and view all the answers

What distinguishes current liabilities from long-term liabilities?

Current liabilities are due within one year. Signup and view all the answers

Which of the following does NOT represent a component of current assets?

Property, plant, and equipment Signup and view all the answers

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

To detail a firm's revenue, expenses, and profitability. Signup and view all the answers

Which of the following is categorized as equity on the balance sheet?

Ordinary share capital Signup and view all the answers

Which of the following long-term liabilities is specifically a type of loan?

Debentures Signup and view all the answers

What does the term 'Net Current Assets' represent?

Total assets minus current liabilities Signup and view all the answers

Which financial component typically has higher priority in case of liquidation?

Long-term debt Signup and view all the answers

What is the main purpose of the profit and loss appropriations account?

To track money paid back to business owners and dividends deducted Signup and view all the answers

How does retained profit affect the balance sheet?

It is added to the retained earnings from the previous year Signup and view all the answers

What was Ardmore Limited's net profit after tax for 2012?

€989,000 Signup and view all the answers

What amount did Ardmore Limited pay out in dividends in 2012?

€247,250 Signup and view all the answers

Which expense category had the highest amount deducted from Ardmore Limited's gross profit in 2012?

Administration expenses Signup and view all the answers

What constitutes the retained earnings listed on Ardmore Limited's balance sheet for 2012?

Retained profit from the current year and previous reserves Signup and view all the answers

According to the cash flow statement, how is profit defined?

Revenue earned minus costs incurred in earning that revenue Signup and view all the answers

What was the total value of fixed assets listed for Ardmore Limited in 2012?

€5,653,000 Signup and view all the answers

Which of these figures reflects Ardmore Limited's current assets for 2012?

€5,718,000 Signup and view all the answers

Which of the following is NOT a component of Ardmore Limited's operating expenses for 2012?

Interest costs Signup and view all the answers