Palgrave Macmillan: Companion website for Collis - Business Accounting: Chapter 6

The trading account of a business shows:
1. the cash left after cost of sales has been deducted from sales revenue
2. the cash left after closing stock (inventory) has been deducted from purchases
3. the gross profit of a business
4. the net profit of a business
The correct calculation of cost of sales requires the deduction of:
1. all sales
2. all expenses
3. gross profit
4. closing stock (inventory)
The accruals concept requires the profit and loss account to be prepared on the assumption that:
1. all revenue has been received
2. all costs and expenses have been paid for
3. all revenue has been matched with associated costs and expenses
4. all stocks have been sold
The accruals concept requires the profit and loss account to be prepared on the assumption that:
1. all revenue relates to the financial period
2. all costs and expenses relate to the financial period
3. all stocks have been counted
4. all of these
During the year a business purchases 300 items at £6 each and sells 260 items for £10 each and has 10 items stolen. The value of the closing stock (inventory) is:
1. £240
2. £300
3. £180
4. £60
If gross profit is £22,500 and the cost of sales is £52,500, the value of sales revenue is:
1. £75,000
2. £52,500
3. £22,500
4. £30,000

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