MCQ - P&L

MCQ-P&L
1. What is the primary purpose of the profit and loss account?
 A. To show the financial posi on of a company
 B. To record business transac ons
 C. To calculate income tax
 D. To measure the profitability of a company
Answer: D
2. Where does the net income or net loss appear in the financial statements?
 A. Balance Sheet
 B. Statement of Cash Flows
 C. Profit and Loss Account
 D. Notes to the Financial Statements
Answer: C
3. Which of the following is a revenue account in the profit and loss account?
 A. Salaries Expense
 B. Rent Received
 C. Equipment Purchase
 D. Loan Repayment
Answer: B
4. What does the term "EBITDA" stand for in the context of the profit and loss account?
 A. Earnings Before Interest and Taxes Deprecia on Amor za on
 B. Expenditures and Budge ng for Income Tax Deduc ons Act
 C. Every Business Invests To Develop Assets
 D. Economic Balance for Interest and Dividend Analysis
Answer: A
5. Which sec on of the profit and loss account includes expenses such as rent, u li es, and salaries?
 A. Cost of Goods Sold
 B. Opera ng Expenses
 C. Other Income
 D. Non-opera ng Expenses
Answer: B
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6. What is the formula for calcula ng net profit in the profit and loss account?
 A. Total Revenue - Total Expenses
 B. Gross Profit - Opera ng Expenses
 C. Gross Profit - Cost of Goods Sold
 D. Total Assets - Total Liabili es
Answer: A
7. In the profit and loss account, what is the purpose of the "Deprecia on" entry?
 A. To record the cost of goods sold
 B. To allocate the cost of a tangible asset over its useful life
 C. To account for interest expenses
 D. To account for changes in fair value of investments
Answer: B
8. Which financial statement provides informa on about a company's revenues, expenses, and net
income or loss over a specific period?
 A. Balance Sheet
 B. Cash Flow Statement
 C. Income Statement
 D. Statement of Retained Earnings
Answer: C
9. How is gross profit calculated in the profit and loss account?
 B. Total Revenue - Cost of Goods Sold
 C. Opera ng Income - Opera ng Expenses
 D. Net Income - Taxes
Answer: B
10. Which of the following represents a non-opera ng income in the profit and loss account?
 A. Sales Revenue
 B. Interest Income
 C. Cost of Goods Sold
 D. Salaries Expense
Answer: B
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11. What is the formula for calcula ng opera ng income in the profit and loss account?
 B. Gross Profit - Opera ng Expenses
 C. Total Revenue - Cost of Goods Sold
 D. Net Income - Taxes
Answer: B
12. In the profit and loss account, where would you find the cost of goods sold (COGS)?
 A. Opera ng Expenses
 B. Non-opera ng Expenses
 C. Other Income
 D. Gross Profit
Answer: D
13. What does the term "Net Sales" represent in the profit and loss account?
 A. Total revenue minus returns and allowances
 B. Gross profit minus opera ng expenses
 C. Total revenue minus cost of goods sold
 D. Opera ng income minus non-opera ng income
Answer: A
14. In the profit and loss account, what category would "Interest Expense" typically fall under?
 C. Opera ng Expenses
 D. Other Income
Answer: B
15. How is the opera ng margin calculated in the profit and loss account?
 A. Opera ng Income / Net Sales
 B. Gross Profit / Net Sales
 C. Net Income / Total Revenue
 D. Net Sales / Total Assets
Answer: A
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16. What is the purpose of the "Other Income" sec on in the profit and loss account?
 A. To record income from primary business opera ons
 B. To account for income not related to the core business ac vi es
 C. To calculate net income
 D. To record income from interest and taxes
Answer: B
17. Which of the following is a contra-revenue account in the profit and loss account?
 A. Discounts Allowed
 B. Rent Expense
 C. Sales Revenue
 D. Salaries Expense
Answer: A
18. What does the term "Earnings Per Share (EPS)" represent in the context of the profit and loss
account?
 A. Total earnings before taxes
 B. Net income divided by the number of outstanding shares
 C. Gross profit per share
 D. Opera ng income per share
Answer: B
19. In the profit and loss account, what does "EBIT" stand for?
 A. Earnings Before Interest and Taxes
 B. Every Business Income Total
 C. Expenditures for Business and Income Taxes
 D. Earnings Before Interest and Total Income
Answer: A
20. Where would you find informa on about a company's income tax expense in the profit and loss
account?
 C. Other Income
 D. Below the line, a er net income
Answer: D
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21. What is the purpose of the "Cost of Sales" entry in the profit and loss account?
 A. To calculate net income
 B. To record the total cost of goods sold
 C. To account for interest expenses
 D. To highlight opera ng expenses
Answer: B
22. In the profit and loss account, where would you find the entry for "Dividends Paid"?
 C. Other Income
Answer: D
23. What does the term "Opera ng Expenses" encompass in the profit and loss account?
 A. All expenses incurred by the business
 B. Expenses directly related to the produc on of goods or services
 C. Expenses not directly ed to the core business opera ons
 D. The total expenses minus non-opera ng expenses
Answer: C
24. Where would you find informa on about a company's gains or losses from the sale of assets in the
profit and loss account?
 A. Opera ng Income
 B. Non-opera ng Income
 C. Other Income
Answer: B
25. What is the purpose of the "Interest Income" entry in the profit and loss account?
 A. To record income from interest paid on loans
 B. To account for interest expenses
 C. To highlight opera ng income
 D. To record income from interest earned on investments
Answer: D
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26. In the profit and loss account, what does "COGS" stand for?
 A. Cost of Opera ng Goods and Services
 B. Cost of Outstanding Goods Sold
 C. Cost of Opera ng Goods Sold
 D. Cost of Goods Sold
Answer: D
27. What is the purpose of the "Other Expenses" entry in the profit and loss account?
 A. To record miscellaneous expenses not categorized elsewhere
 B. To calculate net income
 C. To account for opera ng expenses
 D. To highlight non-opera ng expenses
Answer: A
28. Where would you find informa on about a company's interest expenses in the profit and loss
account?
 C. Other Income
Answer: B
29. In the profit and loss account, what category would "Bad Debt Expense" typically fall under?
 D. Other Income
Answer: C
30. How is the net profit margin calculated in the profit and loss account?
 A. Net Income / Total Assets
 B. Net Income / Total Revenue
 C. Opera ng Income / Net Sales
 D. Gross Profit / Net Sales
Answer: B
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31. What does the term "Opera ng Income" represent in the profit and loss account?
 A. Income from primary business opera ons
 B. Income not related to core business ac vi es
 C. Total revenue minus non-opera ng expenses
 D. Gross profit minus opera ng expenses
Answer: A
32. In the profit and loss account, where would you find the entry for "Amor za on Expense"?
 C. Other Income
Answer: A
33. What is the purpose of the "Extraordinary Items" sec on in the profit and loss account?
 A. To record regular business transac ons
 B. To account for unusual and infrequent events
 D. To record interest expenses
Answer: B
34. Where would you find informa on about a company's gains or losses from the sale of investments
in the profit and loss account?
 C. Other Income
Answer: B
35. In the profit and loss account, what category would "Sales Returns and Allowances" typically fall
under?
 D. Other Income
Answer: C
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36. What is the purpose of the "Gain on Sale of Assets" entry in the profit and loss account?
 A. To record gains from regular business ac vi es
 B. To account for gains from the sale of non-opera ng assets
 D. To record interest income
Answer: B
37. Where would you find informa on about a company's gains or losses from foreign currency
exchange in the profit and loss account?
 C. Other Income
Answer: B
38. In the profit and loss account, what does the term "Opera ng Leverage" refer to?
 A. The ra o of opera ng income to net sales
 B. The sensi vity of opera ng income to changes in sales
 C. The total opera ng expenses
 D. The percentage of opera ng income to gross profit
Answer: B
39. What is the purpose of the "Loss on Impairment" entry in the profit and loss account?
 A. To record regular business losses
 B. To account for losses from the sale of non-opera ng assets
 D. To record losses from the impairment of assets
Answer: D
40. Where would you find informa on about a company's gains or losses from changes in fair value of
financial instruments in the profit and loss account?
 C. Other Income
Answer: B
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41. What does the term "Provision for Income Taxes" represent in the profit and loss account?
 A. Actual payment of income taxes
 B. Amount set aside for future income tax obliga ons
 C. Total income before taxes
 D. Opera ng income minus non-opera ng income
Answer: B
42. In the profit and loss account, where would you find the entry for "Research and Development
Expenses"?
 C. Other Income
Answer: A
43. What is the purpose of the "Loss on Disposal of Assets" entry in the profit and loss account?
 D. To record losses from the disposal of assets
Answer: B
44. Where would you find informa on about a company's gains or losses from changes in accoun ng
policies in the profit and loss account?
 C. Other Income
Answer: B
45. In the profit and loss account, what category would "Insurance Expense" typically fall under?
 D. Other Income
Answer: C
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46. What does the term "Net Income Before Tax" represent in the profit and loss account?
 A. Total income before taxes
 C. Net income minus income tax expense
 D. Opera ng income plus non-opera ng income
Answer: A
47. In the profit and loss account, what does the term "Net Income A er Tax" represent?
 B. Net income minus income tax expense
 C. Gross profit minus opera ng expenses
Answer: B
48. What is the purpose of the "Share of Profit of Associates" entry in the profit and loss account?
 A. To record the company's own profit
 B. To account for profits earned by other associated companies
Answer: B
49. Where would you find informa on about a company's gains or losses from discon nued opera ons
in the profit and loss account?
 C. Other Income
Answer: B
50. In the profit and loss account, what category would "U li es Expense" typically fall under?
 D. Other Income
Answer: C
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Feel free to use these ques ons for prac ce, and let me know if there's a specific area you'd like more
ques ons on!
51. What is the purpose of the "Gain on Sale of Investments" entry in the profit and loss account?
 A. To record regular business gains
Answer: B
52. In the profit and loss account, where would you find the entry for "Freight Outward"?
 D. Other Income
Answer: C
53. What does the term "Non-opera ng Income" encompass in the profit and loss account?
Answer: B
biological assets in the profit and loss account?
 C. Other Income
Answer: B
55. In the profit and loss account, what category would "Commissions Expense" typically fall under?
 D. Other Income Answer: C
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56. What is the purpose of the "Share of Loss of Associates" entry in the profit and loss account?
 A. To record the company's own loss
 B. To account for losses incurred by other associated companies
Answer: B
property, plant, and equipment in the profit and loss account?
 C. Other Income
Answer: B
58. In the profit and loss account, what does the term "Opera ng Ra o" measure?
 B. The percentage of opera ng expenses to net sales
 C. The sensi vity of opera ng income to changes in sales
 D. The ra o of non-opera ng income to net sales
Answer: B
59. What does the term "Opera ng Expenses to Sales Ra o" measure in the profit and loss account?
Answer: B
60. In the profit and loss account, where would you find the entry for "Maintenance and Repairs
Expense"?
 C. Other Income
Answer: A
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61. What is the purpose of the "Loss on Foreign Exchange" entry in the profit and loss account?
 B. To account for losses from foreign exchange transac ons
 D. To record losses from the disposal of foreign assets
Answer: B
financial liabili es in the profit and loss account?
 C. Other Income
Answer: B
63. In the profit and loss account, what category would "Marke ng Expenses" typically fall under?
 D. Other Income
Answer: C
64. What is the purpose of the "Loss on Ex nguishment of Debt" entry in the profit and loss account?
 B. To account for losses from the repayment of debt
 D. To record losses from the sale of debt instruments
Answer: B
equity securi es in the profit and loss account?
 C. Other Income
Answer: B
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66. In the profit and loss account, what does the term "Total Opera ng Income" represent?
 B. The total of gross profit and opera ng expenses
 C. The sum of all income, both opera ng and non-opera ng
Answer: B
67. What is the purpose of the "Other Gains and Losses" sec on in the profit and loss account?
 A. To record regular business gains and losses
 B. To account for gains and losses not categorized elsewhere
 D. To highlight non-opera ng gains and losses
Answer: B
financial assets in the profit and loss account?
 C. Other Income
Answer: B
69. In the profit and loss account, what category would "Training and Development Expenses" typically
fall under?
 D. Other Income
Answer: C
70. What does the term "Net Income Before Extraordinary Items" represent in the profit and loss
account?
Answer: A
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71. In the profit and loss account, where would you find the entry for "Royal es Expense"?
 C. Other Income
Answer: C
72. What is the purpose of the "Net Income A er Extraordinary Items" entry in the profit and loss
account?
 A. To record regular business income
 D. To record non-opera ng income
Answer: B
investments in the profit and loss account?
 C. Other Income
Answer: B
74. In the profit and loss account, what category would "Travel Expenses" typically fall under?
 D. Other Income
Answer: C
75. What does the term "Total Revenue" represent in the profit and loss account?
 A. Gross profit plus opera ng expenses
 B. The sum of all income, both opera ng and non-opera ng
 C. Income from primary business opera ons
Answer: B
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76. What is the purpose of the "Loss on Deriva ves" entry in the profit and loss account?
 B. To account for losses from deriva ve transac ons
Answer: B
77. In the profit and loss account, where would you find the entry for "Employee Benefits Expense"?
 D. Other Income
Answer: C
78. What does the term "Total Expenses" represent in the profit and loss account?
 A. The total of gross profit and opera ng income
 B. The sum of all expenses, both opera ng and non-opera ng
 C. Expenses directly related to the produc on of goods or services
Answer: B
financial liabili es designated at fair value through profit or loss in the profit and loss account?
 C. Other Income
Answer: B
80. In the profit and loss account, what category would "Deprecia on Expense" typically fall under?
 D. Other Income
Answer: C
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81. What is the purpose of the "Income from Associates" entry in the profit and loss account?
Answer: B
financial liabili es designated at fair value through other comprehensive income in the profit and loss
account?
 C. Other Income
Answer: B
83. In the profit and loss account, what does the term "Total Other Income" represent?
 C. The total of gross profit and opera ng income
Answer: B
84. What is the purpose of the "Share-based Payment Expense" entry in the profit and loss account?
 A. To record regular business expenses
 B. To account for expenses related to share-based payments to employees
Answer: B
financial assets at fair value through other comprehensive income in the profit and loss account?
 C. Other Income
Answer: B
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86. In the profit and loss account, what category would "Legal and Professional Fees" typically fall
under?
 D. Other Income
Answer: C
87. What does the term "Net Income from Con nuing Opera ons" represent in the profit and loss account?
 C. Gross profit minus opera ng expenses
Answer: B
financial liabili es at fair value through other comprehensive income in the profit and loss account?
 C. Other Income
Answer: B
89. In the profit and loss account, what does the term "Net Income A ributable to Owners of the
Parent" represent?
 C. The por on of net income that belongs to the parent company's shareholders
Answer: C
90. What is the purpose of the "Impairment Loss on Financial Instruments" entry in the profit and loss account?
 B. To account for losses from the impairment of financial instruments
Answer: B
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equity securi es designated at fair value through profit or loss in the profit and loss account?
 C. Other Income
Answer: B
92. In the profit and loss account, what category would "Office Supplies Expense" typically fall under?
 D. Other Income
Answer: C
93. What does the term "Net Income from Discon nued Opera ons" represent in the profit and loss
account?
 C. Income or loss generated from the sale or disposal of a segment of a business
Answer: C
financial assets designated at fair value through profit or loss in the profit and loss account?
 C. Other Income
Answer: B
95. In the profit and loss account, what does the term "Net Income from Associates" represent?
 C. Income earned from other associated companies
Answer: C
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96. What is the purpose of the "Gain on Ex nguishment of Debt" entry in the profit and loss account?
 B. To account for gains from the repayment of debt
Answer: B
liabili es designated at fair value through profit or loss in the profit and loss account?
 C. Other Income
Answer: B
98. In the profit and loss account, what category would "Occupancy Expenses" typically fall under?
 D. Other Income
Answer: C
99. What does the term "Net Income from Equity Investments" represent in the profit and loss account?
 C. Income earned from equity investments
Answer: C
financial liabili es measured at amor zed cost in the profit and loss account?
 C. Other Income
Answer: B
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101. What is the purpose of the "Loss on Impairment of Assets" entry in the profit and loss account?
 B. To account for losses from the impairment of assets
Answer: B
102. In the profit and loss account, where would you find the entry for "U li es Expense"?
 D. Other Income
Answer: C
103. What does the term "Total Non-opera ng Income" represent in the profit and loss account?
 A. The sum of all income, both opera ng and non-opera ng
Answer: B
liabili es designated at fair value through other comprehensive income in the profit and loss account?
 C. Other Income
Answer: B
105. In the profit and loss account, what category would "Employee Training Expense" typically fall
under?
 D. Other Income
Answer: C
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106. What is the purpose of the "Gain on Sale of Property, Plant, and Equipment" entry in the profit and
loss account?
Answer: B
 C. Other Income
Answer: B
108. In the profit and loss account, what does the term "Total Other Expenses" represent?
 A. The sum of all expenses, both opera ng and non-opera ng
 B. Expenses not related to core business ac vi es
Answer: A
109. What is the purpose of the "Net Income from Other Opera ng Ac vi es" entry in the profit and
loss account?
 B. To account for income from ac vi es not categorized elsewhere
Answer: B
financial liabili es measured at fair value through profit or loss in the profit and loss account?
 C. Other Income
 D. Below the line, a er net income Answer: B

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111. In the profit and loss account, what category would "Royal es Expense" typically fall under?
 D. Other Income
Answer: C
112. What does the term "Net Income from Other Sources" represent in the profit and loss account?
 C. Income from sources not related to core business ac vi es
Answer: C
financial assets measured at amor zed cost in the profit and loss account?
 C. Other Income
Answer: B
114. In the profit and loss account, what does the term "Total Non-opera ng Expenses" represent?
Answer: B
115. What is the purpose of the "Loss on Write-down of Inventory" entry in the profit and loss account?
 B. To account for losses from the write-down of inventory
Answer: B
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financial assets at fair value through profit or loss in the profit and loss account?
 C. Other Income
Answer: B
117. In the profit and loss account, what category would "Shipping and Handling Expenses" typically fall
under?
 D. Other Income
Answer: C
118. What does the term "Net Income from Other Investments" represent in the profit and loss
account?
 C. Income from other investments not related to core business ac vi es
Answer: C
investments in equity securi es in the profit and loss account?
 C. Other Income
Answer: B
120. In the profit and loss account, what does the term "Total Extraordinary Items" represent?
 B. Unusual and infrequent events impac ng net income
 D. Gross profit minus opera ng expenses Answer: B

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121. What is the purpose of the "Net Income from Other Financial Instruments" entry in the profit and
loss account?
 B. To account for income from financial instruments not categorized elsewhere
 D. To record interest income Answer: B
 C. Other Income
Answer: B
 D. Other Income
Answer: C
124. What does the term "Net Income from Other Financing Ac vi es" represent in the profit and loss
account?
 C. Income from financing ac vi es not related to core business opera ons
Answer: C
 C. Other Income
Answer: B
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Answer: B
127. In the profit and loss account, where would you find the entry for "Freight Outward"?
 D. Other Income
Answer: C
128. What does the term "Non-opera ng Income" encompass in the profit and loss account?
Answer: B
biological assets in the profit and loss account?
 C. Other Income
Answer: B
130. In the profit and loss account, what category would "Commissions Expense" typically fall under?
 D. Other Income
Answer: C
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131. What is the purpose of the "Share of Loss of Associates" entry in the profit and loss account?
 A. To record the company's own loss
 B. To account for losses incurred by other associated companies
Answer: B
property, plant, and equipment in the profit and loss account?
 C. Other Income
Answer: B
133. In the profit and loss account, what does the term "Opera ng Ra o" measure?
Answer: B
134. What does the term "Opera ng Expenses to Sales Ra o" measure in the profit and loss account?
Answer: B
135. In the profit and loss account, where would you find the entry for "Maintenance and Repairs
Expense"?
 C. Other Income
Answer: A
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136. What is the purpose of the "Loss on Foreign Exchange" entry in the profit and loss account?
 B. To account for losses from foreign exchange transac ons
 D. To record losses from the disposal of foreign assets
Answer: B
financial liabili es in the profit and loss account?
 C. Other Income
Answer: B
138. In the profit and loss account, what category would "Marke ng Expenses" typically fall under?
 D. Other Income
Answer: C
139. What is the purpose of the "Loss on Ex nguishment of Debt" entry in the profit and loss account?
 B. To account for losses from the repayment of debt
 D. To record losses from the sale of debt instruments
Answer: B
equity securi es in the profit and loss account?
 C. Other Income
Answer: B
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141. In the profit and loss account, what does the term "Total Opera ng Income" represent?
Answer: B
142. What is the purpose of the "Other Gains and Losses" sec on in the profit and loss account?
 A. To record regular business gains and losses
 B. To account for gains and losses not categorized elsewhere
 D. To highlight non-opera ng gains and losses
Answer: B
 C. Other Income
Answer: B
144. In the profit and loss account, what category would "Training and Development Expenses" typically
fall under?
 D. Other Income
Answer: C
145. What does the term "Net Income Before Extraordinary Items" represent in the profit and loss
account?
Answer: A
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146. In the profit and loss account, where would you find the entry for "Royal es Expense"?
 C. Other Income
Answer: C
147. What is the purpose of the "Net Income A er Extraordinary Items" entry in the profit and loss
account?
 D. To record non-opera ng income
Answer: B
 C. Other Income
Answer: B
149. In the profit and loss account, what category would "Travel Expenses" typically fall under?
 D. Other Income
Answer: C
150. What does the term "Total Revenue" represent in the profit and loss account?
 A. Gross profit plus opera ng expenses
 C. Income from primary business opera ons
Answer: B
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151. What is the purpose of the "Gain on Sale of Intangible Assets" entry in the profit and loss account?
 B. To account for gains from the sale of intangible assets
Answer: B
152. In the profit and loss account, where would you find the entry for "Insurance Expense"?
 D. Other Income
Answer: C
153. What does the term "Total Non-opera ng Expenses" represent in the profit and loss account?
Answer: B
con ngent considera on in the profit and loss account?
 C. Other Income
Answer: B
155. In the profit and loss account, what category would "Research and Development Expenses"
typically fall under?
 D. Other Income
Answer: C
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156. What is the purpose of the "Share of Profit of Associates" entry in the profit and loss account?
Answer: B
financial assets at fair value through other comprehensive income in the profit and loss account?
 C. Other Income
Answer: B
158. In the profit and loss account, what does the term "Total Other Comprehensive Income" represent?
 B. Comprehensive income not included in net income
Answer: B
159. What is the purpose of the "Net Income from Other Opera ng Ac vi es" entry in the profit and
loss account?
 B. To account for income from ac vi es not categorized elsewhere
Answer: B
financial liabili es measured at fair value through profit or loss in the profit and loss account?
 C. Other Income
Answer: B
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161. In the profit and loss account, what category would "Adver sing Expenses" typically fall under?
 D. Other Income
Answer: C
162. What does the term "Net Income from Other Comprehensive Income" represent in the profit and
loss account?
 C. Income included in comprehensive income but not in net income
Answer: C
financial assets measured at amor zed cost in the profit and loss account?
 C. Other Income
Answer: B
164. In the profit and loss account, what does the term "Total Comprehensive Income" represent?
 B. Comprehensive income including net income and other comprehensive income
Answer: B
165. What is the purpose of the "Loss on Sale of Investments" entry in the profit and loss account?
Answer: B
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 C. Other Income
Answer: B
167. In the profit and loss account, what category would "Distribu on Expenses" typically fall under?
 D. Other Income
Answer: C
account?
Answer: C
 C. Other Income
Answer: B
170. In the profit and loss account, what does the term "Net Income from Other Inves ng Ac vi es"
represent?
 C. Income from inves ng ac vi es not related to core business opera ons
 D. Opera ng income plus non-opera ng income Answer: C

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171. What is the purpose of the "Net Income from Other Comprehensive Income" entry in the profit
and loss account?
 B. To account for income included in comprehensive income but not in net income
Answer: B
 C. Other Income
Answer: B
 D. Other Income
Answer: C
account?
Answer: C
 C. Other Income

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176. What is the purpose of the "Gain on Sale of Marketable Securi es" entry in the profit and loss
account?
 B. To account for gains from the sale of marketable securi es
Answer: B
177. In the profit and loss account, where would you find the entry for "Legal Expenses"?
 D. Other Income
Answer: C
178. What does the term "Total Opera ng Expenses" represent in the profit and loss account?
 B. Expenses related to core business ac vi es
Answer: C
financial assets available for sale in the profit and loss account?
 C. Other Income
Answer: B
180. In the profit and loss account, what category would "Interest Expense" typically fall under?
 D. Other Income
Answer: B
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181. What is the purpose of the "Share of Other Comprehensive Income of Associates" entry in the
 B. To account for comprehensive income of other associated companies
Answer: B
 C. Other Income
Answer: B
Answer: B
184. What does the term "Net Income from Other Comprehensive Income" represent in the profit and
loss account?
 C. Income included in comprehensive income but not in net income
Answer: C
investments in debt securi es in the profit and loss account?
 C. Other Income

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186. In the profit and loss account, what category would "Amor za on Expense" typically fall under?
 D. Other Income
Answer: C
187. What is the purpose of the "Net Income from Other Financing Ac vi es" entry in the profit and
loss account?
Answer: C
investments in equity securi es at fair value through other comprehensive income in the profit and loss
account?
 C. Other Income
Answer: B
189. In the profit and loss account, what does the term "Net Income from Other Opera ng Ac vi es"
represent?
 C. Income from ac vi es not related to core business opera ons
Answer: D
190. What is the purpose of the "Loss on Sale of Property" entry in the profit and loss account?
 B. To account for losses from the sale of property
 D. To record interest expenses Answer: B

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financial liabili es measured at fair value through other comprehensive income in the profit and loss
account?
 C. Other Income
Answer: B
192. In the profit and loss account, what category would "Employee Benefits Expense" typically fall
under?
 D. Other Income
Answer: C
 D. Opera ng income plus non-opera ng income Answer: A
investments in equity securi es measured at fair value through profit or loss in the profit and loss
account?
 C. Other Income
Answer: B
195. In the profit and loss account, what does the term "Total Opera ng Revenue" represent?
 D. Gross profit minus opera ng expenses Answer: A
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196. What is the purpose of the "Net Income from Other Inves ng Ac vi es" entry in the profit and loss
account?
Answer: C
financial assets measured at fair value through profit or loss in the profit and loss account?
 C. Other Income
Answer: B
 D. Other Income
Answer: C
199. What does the term "Net Income A er Tax" represent in the profit and loss account?
Answer: C
account?
 C. Other Income

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and loss account?
Answer: B
202. In the profit and loss account, where would you find the entry for "Bad Debt Expense"?
 D. Other Income
Answer: C
Answer: B
 C. Other Income
Answer: B
205. In the profit and loss account, what category would "Warranty Expenses" typically fall under?
 D. Other Income
Answer: C
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206. What is the purpose of the "Share of Other Comprehensive Income of Joint Ventures" entry in the
 B. To account for comprehensive income of joint ventures
Answer: B
investments in equity securi es measured at fair value through other comprehensive income in the
 C. Other Income
Answer: B
Answer: B
209. What does the term "Net Income from Other Financing Ac vi es" represent in the profit and loss account?
Answer: C
 C. Other Income

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211. In the profit and loss account, what category would "Loss on Disposal of Assets" typically fall
under?
 D. Other Income
Answer: C
account?
Answer: C
con ngent considera on in the profit and loss account?
 C. Other Income
Answer: B
Answer: B
215. What is the purpose of the "Loss on Sale of Investments" entry in the profit and loss account?
P a g e 43 | 130
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 C. Other Income
Answer: B
217. In the profit and loss account, what category would "Employee Stock Op on Expense" typically fall
under?
 D. Other Income
Answer: C
218. What does the term "Net Income A er Tax" represent in the profit and loss account?
Answer: C
 C. Other Income
Answer: B
220. In the profit and loss account, what does the term "Net Income from Other Financing Ac vi es"
represent?

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221. What is the purpose of the "Gain on Sale of Property" entry in the profit and loss account?
 B. To account for gains from the sale of property
Answer: B
account?
 C. Other Income
Answer: B
 D. Other Income
Answer: C
224. What does the term "Net Income from Other Opera ng Ac vi es" represent in the profit and loss
account?
Answer: D
 C. Other Income

P a g e 45 | 130
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 B. To account for gains from the sale of investments
Answer: B
227. In the profit and loss account, where would you find the entry for "Consul ng Fees Expense"?
 D. Other Income
Answer: C
228. What does the term "Total Opera ng Income" represent in the profit and loss account?
 B. Income related to core business ac vi es
 C. The total of gross profit and opera ng expenses
Answer: B
 C. Other Income
Answer: B
230. In the profit and loss account, what category would "Amor za on of Intangible Assets" typically
fall under?
 D. Other Income
Answer: C
P a g e 46 | 130
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Answer: B
 C. Other Income
Answer: B
account?
Answer: C
 C. Other Income
Answer: B
P a g e 47 | 130
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 D. Other Income
Answer: C
account?
Answer: C
account?
 C. Other Income
Answer: B
Answer: B
240. What is the purpose of the "Loss on Sale of Assets" entry in the profit and loss account?
 B. To account for losses from the sale of assets

P a g e 48 | 130
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account?
 C. Other Income
Answer: B
under?
 D. Other Income
Answer: C
Answer: A
investments in equity securi es measured at fair value through other comprehensive income in the P&L?
 C. Other Income
Answer: B

P a g e 49 | 130
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Answer: B
account?
 C. Other Income
Answer: B
 D. Other Income
Answer: C
account?
Answer: D
 C. Other Income

P a g e 50 | 130
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and loss account?
Answer: B
 D. Other Income
Answer: C
Answer: B
 C. Other Income
Answer: B
 D. Other Income
Answer: C
P a g e 51 | 130
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Answer: B
 C. Other Income
Answer: B
Answer: B
account?
Answer: C
 C. Other Income

P a g e 52 | 130
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 D. Other Income
Answer: C
account?
Answer: C
account?
 C. Other Income
Answer: B
Answer: B

P a g e 53 | 130
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account?
 C. Other Income
Answer: B
under?
 D. Other Income
Answer: C
Answer: A
 C. Other Income
Answer: B
P a g e 54 | 130
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Answer: C
Answer: B
account?
 C. Other Income
Answer: B
 D. Other Income
Answer: C
account?
 D. Opera ng income plus non-opera ng income Answer: D
P a g e 55 | 130
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 C. Other Income
Answer: B
Answer: B
 D. Other Income
Answer: C
Answer: B
 C. Other Income
Answer: B
P a g e 56 | 130
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fall under?
 D. Other Income
Answer: C
Answer: B
 C. Other Income
Answer: B
Answer: B
account?

P a g e 57 | 130
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 C. Other Income
Answer: B
 D. Other Income
Answer: C
account?
Answer: C
account?
 C. Other Income
Answer: B
P a g e 58 | 130
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Answer: B
Answer: B
account?
 C. Other Income
Answer: B
under?
 D. Other Income
Answer: C
Answer: A
P a g e 59 | 130
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 C. Other Income
Answer: B
Answer: C
Answer: B
account?
 C. Other Income
Answer: B

P a g e 60 | 130
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account?
Answer: D
 C. Other Income
Answer: B
and loss account?
Answer: B
Answer: B
P a g e 61 | 130
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 C. Other Income
Answer: B
 D. Other Income
Answer: C
Answer: B
 C. Other Income
Answer: B
Answer: B
P a g e 62 | 130
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account?
Answer: C
 C. Other Income
Answer: B
account?
Answer: C
account?
 C. Other Income

P a g e 63 | 130
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Answer: B
Answer: B
account?
 C. Other Income
Answer: B
under?
 D. Other Income
Answer: C
Answer: A
P a g e 64 | 130
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 C. Other Income
Answer: B
Answer: C
Answer: B
account?
 C. Other Income
Answer: B

P a g e 65 | 130
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account?
Answer: D
 C. Other Income
Answer: B
Answer: B
 D. Other Income
Answer: C
 D. Gross profit minus opera ng expens
Answer: B
P a g e 66 | 130
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 C. Other Income
Answer: B
fall under?
 D. Other Income
Answer: C
Answer: B
 C. Other Income
Answer: B

P a g e 67 | 130
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account?
Answer: C
 C. Other Income
Answer: B
 D. Other Income
Answer: C
account?
Answer: C
P a g e 68 | 130
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account?
 C. Other Income
Answer: B
Answer: B
Answer: B
account?
 C. Other Income
Answer: B
P a g e 69 | 130
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under?
 D. Other Income
Answer: C
Answer: A
 C. Other Income
Answer: B
Answer: C
Answer: B
P a g e 70 | 130
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account?
 C. Other Income
Answer: B
 D. Other Income
Answer: C
account?
Answer: D
 C. Other Income
Answer: B
P a g e 71 | 130
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and loss account?
Answer: B
 D. Other Income
Answer: C
Answer: B
 C. Other Income
Answer: B
 D. Other Income
Answer: C
P a g e 72 | 130
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Answer: B
 C. Other Income
Answer: B
Answer: B
account?
Answer: C
 C. Other Income

P a g e 73 | 130
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 D. Other Income
Answer: C
account?
Answer: C
account?
 C. Other Income
Answer: B
Answer: B

P a g e 74 | 130
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account?
 C. Other Income
Answer: B
under?
 D. Other Income
Answer: C
Answer: A
 C. Other Income
Answer: B
P a g e 75 | 130
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Answer: C
Answer: B
account?
 C. Other Income
Answer: B
 D. Other Income
Answer: C
account?
Answer: D
P a g e 76 | 130
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 C. Other Income
Answer: B
Answer: B
 D. Other Income
Answer: C
Answer: B
 C. Other Income
Answer: B
P a g e 77 | 130
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fall under?
 D. Other Income
Answer: C
Answer: B
 C. Other Income
Answer: B
Answer: B
account?

P a g e 78 | 130
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 C. Other Income
Answer: B
 D. Other Income
Answer: C
account?
Answer: C
account?
 C. Other Income
Answer: B
P a g e 79 | 130
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Answer: B
Answer: B
account?
 C. Other Income
Answer: B
under?
 D. Other Income
Answer: C
Answer: A
P a g e 80 | 130
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 C. Other Income
Answer: B
Answer: C
Answer: B
account?
 C. Other Income
Answer: B

P a g e 81 | 130
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account?
Answer: D
 C. Other Income
Answer: B
and loss account?
Answer: B
 D. Other Income
Answer: C
Answer: B
P a g e 82 | 130
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 C. Other Income
Answer: B
 D. Other Income
Answer: C
Answer: B
 C. Other Income
Answer: B
Answer: B
P a g e 83 | 130
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account?
Answer: C
 C. Other Income
Answer: B
 D. Other Income
Answer: C
account?
Answer: C
P a g e 84 | 130
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account?
 C. Other Income
Answer: B
Answer: B
Answer: B
account?
 C. Other Income
Answer: B
P a g e 85 | 130
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under?
 D. Other Income
Answer: C
Answer: A
 C. Other Income
Answer: B
Answer: C
Answer: B
P a g e 86 | 130
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account?
 C. Other Income
Answer: B
 D. Other Income
Answer: C
account?
Answer: D
 C. Other Income
Answer: B
P a g e 87 | 130
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Answer: B
 D. Other Income
Answer: C
Answer: B
 C. Other Income
Answer: B
fall under?
 D. Other Income
Answer: C
P a g e 88 | 130
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Answer: B
 C. Other Income
Answer: B
Answer: B
account?
Answer: C
 C. Other Income

P a g e 89 | 130
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 D. Other Income
Answer: C
account?
Answer: C
account?
 C. Other Income
Answer: B
Answer: B

P a g e 90 | 130
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account?
 C. Other Income
Answer: B
442. In the profit and loss account, what category would "Employee Benefits Expense" typically fall under?
 D. Other Income
Answer: C
Answer: A
 C. Other Income
Answer: B

P a g e 91 | 130
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Answer: B
account?
 C. Other Income
Answer: B
 D. Other Income
Answer: C
account?
Answer: D
 C. Other Income

P a g e 92 | 130
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and loss account?
Answer: B
 D. Other Income
Answer: C
Answer: B
 C. Other Income
Answer: B
 D. Other Income
Answer: C
P a g e 93 | 130
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Answer: B
 C. Other Income
Answer: B
Answer: B
account?
Answer: C
 C. Other Income

P a g e 94 | 130
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 D. Other Income
Answer: C
account?
Answer: C
account?
 C. Other Income
Answer: B
Answer: B

P a g e 95 | 130
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account?
 C. Other Income
Answer: B
under?
 D. Other Income
Answer: C
Answer: A
 C. Other Income
Answer: B
P a g e 96 | 130
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Answer: C
Answer: B
account?
 C. Other Income
Answer: B
 D. Other Income
Answer: C
account?
Answer: D
P a g e 97 | 130
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 C. Other Income
Answer: B
Answer: B
 D. Other Income
Answer: C
Answer: B
 C. Other Income
Answer: B
P a g e 98 | 130
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fall under?
 D. Other Income
Answer: C
Answer: B
 C. Other Income
Answer: B
Answer: B
account?

P a g e 99 | 130
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 C. Other Income
Answer: B
 D. Other Income
Answer: C
account?
Answer: C
account?
 C. Other Income
Answer: B
P a g e 100 | 130
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Answer: B
Answer: B
account?
 C. Other Income
Answer: B
under?
 D. Other Income
Answer: C
Answer: A
P a g e 101 | 130
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 C. Other Income
Answer: B
Answer: C
Answer: B
account?
 C. Other Income
Answer: B

P a g e 102 | 130
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account?
Answer: D
 C. Other Income
Answer: B
and loss account?
Answer: B
 D. Other Income
Answer: C
Answer: B
P a g e 103 | 130
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 C. Other Income
Answer: B
 D. Other Income
Answer: C
Answer: B
 C. Other Income
Answer: B
Answer: B
P a g e 104 | 130
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account?
Answer: C
 C. Other Income
Answer: B
 D. Other Income
Answer: C
account?
Answer: C
P a g e 105 | 130
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account?
 C. Other Income
Answer: B
Answer: B
Answer: B
account?
 C. Other Income
Answer: B
P a g e 106 | 130
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under?
 D. Other Income
Answer: C
Answer: A
 C. Other Income
Answer: B
Answer: C
Answer: B
P a g e 107 | 130
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account?
 C. Other Income
Answer: B
 D. Other Income
Answer: C
account?
Answer: D
 C. Other Income
Answer: B
 D. To record interest income Answer: B

P a g e 108 | 130
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 D. Other Income
Answer: C
Answer: B
 C. Other Income
Answer: B
fall under?
 D. Other Income
Answer: C
Answer: B
P a g e 109 | 130
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 C. Other Income
Answer: B
Answer: B
account?
Answer: C
 C. Other Income
Answer: B

P a g e 110 | 130
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account?
Answer: C
account?
 C. Other Income
Answer: B
Answer: B
Answer: B
P a g e 111 | 130
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account?
 C. Other Income
Answer: B
under?
 D. Other Income
Answer: C
Answer: A
 C. Other Income
Answer: B
P a g e 112 | 130
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Answer: C
Answer: B
account?
 C. Other Income
Answer: B
 D. Other Income
Answer: C
account?
Answer: D
P a g e 113 | 130
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 C. Other Income
Answer: B
and loss account?
Answer: B
 D. Other Income
Answer: C
Answer: B
 C. Other Income
Answer: B
P a g e 114 | 130
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 D. Other Income
Answer: C
Answer: B
 C. Other Income
Answer: B
Answer: B
account?
Answer: C
P a g e 115 | 130
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 C. Other Income
Answer: B
 D. Other Income
Answer: C
account?
Answer: C
account?
 C. Other Income
Answer: B
P a g e 116 | 130
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Answer: B
Answer: B
account?
 C. Other Income
Answer: B
under?
 D. Other Income
Answer: C
Answer: A
P a g e 117 | 130
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 C. Other Income
Answer: B
Answer: C
Answer: B
account?
 C. Other Income
Answer: B

P a g e 118 | 130
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account?
Answer: D
 C. Other Income
Answer: B
Answer: B
 D. Other Income
Answer: C
Answer: B
P a g e 119 | 130
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 C. Other Income
Answer: B
fall under?
 D. Other Income
Answer: C
Answer: B
 C. Other Income
Answer: B

P a g e 120 | 130
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account?
Answer: C
 C. Other Income
Answer: B
 D. Other Income
Answer: C
account?
Answer: C
P a g e 121 | 130
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account?
 C. Other Income
Answer: B
Answer: B
Answer: B
account?
 C. Other Income
Answer: B
P a g e 122 | 130
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under?
 D. Other Income
Answer: C
Answer: A
 C. Other Income
Answer: B
Answer: C
Answer: B
P a g e 123 | 130
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account?
 C. Other Income
Answer: B
 D. Other Income
Answer: C
account?
Answer: D
 C. Other Income
Answer: B
P a g e 124 | 130
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and loss account?
Answer: B
 D. Other Income
Answer: C
Answer: B
 C. Other Income
Answer: B
 D. Other Income
Answer: C
P a g e 125 | 130
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Answer: B
 C. Other Income
Answer: B
Answer: B
account?
Answer: C
 C. Other Income

P a g e 126 | 130
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 D. Other Income
Answer: C
account?
Answer: C
account?
 C. Other Income
Answer: B
Answer: B

P a g e 127 | 130
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account?
 C. Other Income
Answer: B
under?
 D. Other Income
Answer: C
Answer: A
 C. Other Income
Answer: B
P a g e 128 | 130
MCQ-P&L
Answer: C
Answer: B
account?
 C. Other Income
Answer: B
 D. Other Income
Answer: C
account?
Answer: D
P a g e 129 | 130
MCQ-P&L
 C. Other Income
Answer: B
P a g e 130 | 130

MCQ - P&amp;L

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MCQ-P&L

1. What is the primary purpose of the proﬁt and loss account?

 A. To show the ﬁnancial posi on of a company

 B. To record business transac ons

 C. To calculate income tax

 D. To measure the proﬁtability of a company

 B. Statement of Cash Flows

 C. Proﬁt and Loss Account

 D. Notes to the Financial Statements

 A. Earnings Before Interest and Taxes Deprecia on Amor za on

 B. Expenditures and Budge ng for Income Tax Deduc ons Act

 C. Every Business Invests To Develop Assets

 D. Economic Balance for Interest and Dividend Analysis

 A. Cost of Goods Sold

 A. Total Revenue - Total Expenses

 B. Gross Proﬁt - Opera ng Expenses

 C. Gross Proﬁt - Cost of Goods Sold

 D. Total Assets - Total Liabili es

 A. To record the cost of goods sold

 B. To allocate the cost of a tangible asset over its useful life

 C. To account for interest expenses

 D. To account for changes in fair value of investments

 B. Cash Flow Statement

 D. Statement of Retained Earnings

9. How is gross proﬁt calculated in the proﬁt and loss account?

 A. Total Revenue - Total Expenses

 B. Total Revenue - Cost of Goods Sold

 C. Opera ng Income - Opera ng Expenses

 D. Net Income - Taxes

 C. Cost of Goods Sold

 A. Total Revenue - Total Expenses

 B. Gross Proﬁt - Opera ng Expenses

 C. Total Revenue - Cost of Goods Sold

 D. Net Income - Taxes

 A. Total revenue minus returns and allowances

 B. Gross proﬁt minus opera ng expenses

 C. Total revenue minus cost of goods sold

 D. Opera ng income minus non-opera ng income

 A. Cost of Goods Sold

 A. Opera ng Income / Net Sales

 B. Gross Proﬁt / Net Sales

 C. Net Income / Total Revenue

 D. Net Sales / Total Assets

 A. To record income from primary business opera ons

 B. To account for income not related to the core business ac vi es

 C. To calculate net income

 D. To record income from interest and taxes

 A. Total earnings before taxes

 B. Net income divided by the number of outstanding shares

 C. Gross proﬁt per share

 D. Opera ng income per share

 A. Earnings Before Interest and Taxes

 B. Every Business Income Total

 C. Expenditures for Business and Income Taxes

 D. Earnings Before Interest and Total Income

 D. Below the line, a er net income

 A. To calculate net income

 B. To record the total cost of goods sold

 C. To account for interest expenses

 D. To highlight opera ng expenses

 D. Below the line, a er net income

 A. All expenses incurred by the business

 B. Expenses directly related to the produc on of goods or services

 C. Expenses not directly ed to the core business opera ons

MCQ - P&L

MCQ - P&L