Understanding Profit and Loss
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Questions and Answers

Which financial statement provides a snapshot of a company's financial position at a specific point in time?

  • Income statement
  • Balance sheet (correct)
  • Cash flow statement
  • Retained earnings statement

    • What is the term for a financial statement that shows a company's revenues and expenses over a specific period of time?

  • Cash flow statement
  • Retained earnings statement
  • Income statement (correct)
  • Balance sheet

    • What does the term 'revenues' refer to in the context of financial statements?

  • Funds received from issuing bonds
  • Money spent on long-term investments
  • Money received from selling goods or services (correct)
  • Cash payments made to suppliers

    • What is the term for the portion of a company's net income that is not paid out as dividends but is retained for reinvestment in the business?

    <p>Retained earnings</p> Signup and view all the answers

    Which type of financial statement shows the inflow and outflow of cash from operating, investing, and financing activities?

    <p>Cash flow statement</p> Signup and view all the answers

    If a company has more expenses than revenues, what is its financial status?

    <p>Insolvent</p> Signup and view all the answers

    What does the term 'gross profit' represent on an income statement?

    <p>Total revenue minus cost of goods sold</p> Signup and view all the answers

    Which financial statement provides information about the sources and uses of cash during a specific period?

    <p>Statement of Cash Flows</p> Signup and view all the answers

    What do 'assets' represent on a balance sheet?

    <p>Resources owned by the business</p> Signup and view all the answers

    The ratio of current assets to current liabilities is used to assess:

    <p>Liquidity</p> Signup and view all the answers

    Earnings before interest and taxes (EBIT) on an income statement represent:

    <p>Operating profit before tax and interest expense</p> Signup and view all the answers

    Study Notes

    The 101 on "Profit and loss"

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    Description

    Learn about the concepts of profit and loss and how to calculate them. This quiz covers topics such as cost price, selling price, profit percentage, and loss percentage.

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