Profit & Loss Account - The Basics - Flashcards in GCSE Business Studies

Created by: Pippa Jennings
Created on: 14-05-13 20:22

What is Sales Revenue?

a.k.a. Sales turnover, income from sales. This is the money the business receives from customers in exchange for products/services.

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How is the Sales Revenue calculated?

Number of Items Sold x Selling Price. (SR = NIS x SP)

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What is the Cost of Sales?

This is the costs the business incurs in order to make the products to sell.

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How is the Cost of Sales calculated

Opening Stock + Purchases – Closing Stock (CoS = OS + P - CS)

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What is Gross Profit?

The Gross Profit is profit from sales once the cost of sales has been deducted.

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How is Gross Profit calculated?

Sales Revenue – Cost of Sales (GP = SR – CoS)

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What are expenses (a.k.a overheads)?

Expenses are the ‘running costs’ a business has in order to make and sell the product. This commonly includes expenses such as wages and salaries; rents, rates and insurance; Light, heat and power; telephone and broadband.

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How is Total Expenses calculated?

By adding all the given expenses together. (E+E+E+E=TE)

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What is Net Profit?

Net Profit is the profit once the expenses have been deducted.

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How is Net Profit calculated?

Gross Profit – Total Expenses. (NP = GP – TE)

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Other cards in this set

Card 2

Front

How is the Sales Revenue calculated?

Back

Number of Items Sold x Selling Price. (SR = NIS x SP)

Card 3

Front

What is the Cost of Sales?

Back

Card 4

Front

How is the Cost of Sales calculated

Back

Card 5

Front

What is Gross Profit?

Back

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Profit & Loss Account - The Basics