FINANCIAL ACCOUNTS

Multiple-choice questions
 
Try the multiple-choice questions below to test your knowledge.

This activity contains 10 questions.

The profit of a business during an accounting period is equal to

  total cash receipts less total cash payments

  
total cash receipts less total expenses
  
total revenues less total cash payments
  
total revenues less total expenses
  

The income statement shows

  the cash flow of the business

  
the financial performance of the business
  
the financial position of the business
  
the financial performance and the financial position of the business
  

The following are extracts from an income statement for the year
ended 31

£000
December 2009
Sales revenue 10,000
Cost of sales (8,500
)
Distribution costs (300)
Administrative expenses (200)
Net interest paid (150)
Taxation (500)
Dividends (100)
The gross profit is
  £10,000,000
  
£1,200,000
  
£1,000,000
  
£1,500,000
  

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FINANCIAL ACCOUNTS

The following are extracts from an income statement for the year
ended 31

£000
December 2009
Sales revenue 10,000
Cost of sales (8,500
)
Distribution costs (300)
Administrative expenses (200)
Net interest paid (150)
Taxation (500)
Dividends (100)
The operating profit is
  £1,500,000
  
£1,050,000
  
£1,200,000
  
£1,000,000
  

The following are extracts from an income statement for the year
ended 31

£000
December 2009
Sales revenue 10,000
Cost of sales (8,500
)
Distribution costs (300)
Administrative expenses (200)
Net interest paid (150)
Taxation (500)
Dividends (100)
The profit before tax is
  £1,050,000
  
£850,000
  
£1,200,000
  
£350,000
  

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FINANCIAL ACCOUNTS

The following are extracts from an income statement for the year
ended 31

£000
December 2009
Sales revenue 10,000
Cost of£250,000
sales (8,500
 
  
£750,000
  
£900,000
  
£350,000
  

The following are extracts from an income statement for the year
ended 31

£000
December 2009
Sales revenue 10,000
Cost of sales (8,500
)
Distribution costs (300)
Administrative expenses (200)
Net interest paid (150)
Taxation (500)
Dividends (100)
The retained earnings are
  £1,000,000
  
£250,000
  
£850,000
  
£1,500,000
  

A company purchased plant and machinery for £900,000 on 1

January 2007. The company uses straight line depreciation. The
company estimates that the plant and machinery will have a useful
life of 8 years, after which it may be disposed of for £100,000. What

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FINANCIAL ACCOUNTS

was the net book value of the plant and machinery at 31 December
  £562,500
  
£600,000
  
£700,000
  
£787,500
  

£
A company's inventories and purchases information for January
2010 is as follows:
Opening inventories 1 January 2010 10,00
0
Purchases 72,00
0
Closing inventories 31 January 2010 15,00
0
What is the cost of inventory sold in January 2010?
  £87,000
  
£67,000
  
£72,000
  
£77,000