Profit And Loss Statement

Approved & Edited by ProProfs Editorial Team
The editorial team at ProProfs Quizzes consists of a select group of subject experts, trivia writers, and quiz masters who have authored over 10,000 quizzes taken by more than 100 million users. This team includes our in-house seasoned quiz moderators and subject matter experts. Our editorial experts, spread across the world, are rigorously trained using our comprehensive guidelines to ensure that you receive the highest quality quizzes.
Learn about Our Editorial Process
| By Gezzar
G
Gezzar
Community Contributor
Quizzes Created: 2 | Total Attempts: 1,566
Questions: 9 | Attempts: 1,509

SettingsSettingsSettings
Math Quizzes & Trivia

Video presented by Gerald Richards of 3X5X7.
To gauge your understanding of the fundamentals of a Profit & Loss Statement and develop your skills and confidence around financial matters, here is a video and a few questions about the video you have watched.
At 3X5X7 we are big believers in self assessment and action, so please take the time to answer the questions. You can take these questions as many times as you like, until you feel comfortable with your results.
Am happy to receive any questions or comments (profit@3x5x7. Com), as feedback is most important.
Have fun.
Kind Regards
Gerald Read moreRichards
3X5X7
www. 3x5x7. Com


Questions and Answers
  • 1. 

    An overview of a Profit & Loss Statement, identifying: Net Sales/Revenue COGS/COS Fixed and Variable Costs EBITDA

  • 2. 

    “You cannot teach a person anything, you can only help him to discover it within himself” Galileo Galilei. Italian physicist, mathematician, astronomer and philosopher (1564 - 1642).

  • 3. 

    What does COGS stand for?

    Explanation
    COGS stands for Cost of Goods Sold. It is an accounting term that represents the direct costs incurred in producing goods or services that have been sold by a company. This includes the cost of materials, labor, and overhead expenses directly related to the production process. By calculating the COGS, a company can determine its gross profit and assess the profitability of its products or services. The variations in capitalization (uppercase and lowercase) do not change the meaning of the acronym.

    Rate this question:

  • 4. 

    The Profit and Loss Account always starts with sales/revenue, from which costs and expenses will be deducted.

    • A.

      True

    • B.

      False

    • C.

      Depends

    • D.

      Not sure

    Correct Answer
    A. True
    Explanation
    The Profit and Loss Account is a financial statement that shows a company's revenues, costs, and expenses during a specific period. It is designed to determine the net profit or loss of the company. Sales or revenue is the starting point of this account, as it represents the income generated by the company through its primary operations. From this revenue, various costs and expenses such as production costs, operating expenses, and taxes are deducted to calculate the net profit or loss. Therefore, it is true that the Profit and Loss Account always starts with sales/revenue.

    Rate this question:

  • 5. 

    "Expenses that have to be paid, irrespective of the volume of business done by the company" is a description of?

    • A.

      Cost of Sales

    • B.

      Variable Expenses

    • C.

      EBITDA

    • D.

      Fixed Expenses

    Correct Answer
    D. Fixed Expenses
    Explanation
    Fixed expenses are costs that remain constant regardless of the volume of business done by the company. These expenses are necessary for the operation of the business and must be paid regularly. Examples of fixed expenses include rent, salaries, insurance, and utilities. Unlike variable expenses, which fluctuate with the level of business activity, fixed expenses remain the same. Understanding fixed expenses is important for budgeting and financial planning, as they represent a consistent financial commitment for the company.

    Rate this question:

  • 6. 

    What does COP/EBITDA stand for?

    Correct Answer
    Cash Operating Profit/Earnings Before Interest, Tax, Depreciation and Amortisation
    Cash Operating Profit/Earnings Before Interest Tax Depreciation and Amortisation
    Cash Operating Profit/Earnings Before Interest, Tax, Depreciation and Amortization
    Cash Operating Profit/Earnings Before Interest Tax Depreciation and Amortization
    Cash Operating Profit/Earnings Before Interest Tax Depreciation Amortisation
    Cash Operating Profit/Earnings Before Interest, Tax, Depreciation,Amortisation
    cash operating profit/earnings before interest tax depreciation amortisation
    cash operating profit/earnings before interest, tax, depreciation, amortisation
    Explanation
    The correct answer is "Cash Operating Profit/Earnings Before Interest, Tax, Depreciation and Amortisation." This acronym, COP/EBITDA, represents a financial metric used to measure a company's profitability and cash flow. It calculates the operating profit before deducting interest expenses, taxes, depreciation, and amortization. By excluding these non-cash expenses, COP/EBITDA provides a clearer picture of a company's ability to generate cash from its core operations.

    Rate this question:

  • 7. 

    Variable expenses are those expenses which, to a certain extent, can be controlled and varied according to the volume of business done.

    • A.

      True

    • B.

      False

    Correct Answer
    A. True
    Explanation
    Variable expenses are costs that can be adjusted based on the level of business activity. These expenses are not fixed and can increase or decrease depending on factors such as sales volume or production levels. By managing variable expenses, a business can have greater control over its costs and adjust them accordingly to optimize profitability. Therefore, the statement that variable expenses can be controlled and varied according to the volume of business done is true.

    Rate this question:

  • 8. 

    COGS/COS is $985,876. Variable Expenses are $189,429. Net Sales/Revenue is $1,784,923 and Fixed Expenses are $398,929. What is the COP/EBITDA?

    Correct Answer
    $210,689
    $210689
    210,689
    210689
    Explanation
    The COP/EBITDA can be calculated by subtracting the variable expenses from the net sales/revenue and then subtracting the fixed expenses from the result. In this case, the variable expenses are $189,429 and the fixed expenses are $398,929. Therefore, the COP/EBITDA is $1,784,923 - $189,429 - $398,929 = $1,196,565.

    Rate this question:

  • 9. 

    Net Sales/Revenue is $12,784,923. Fixed Expenses are $3,068,382. Variable Expenses are $1,278,492 and COGS are $7,031,708. What is the Gross Profit/Margin and the COP/EBITDA?

    • A.

      Gross Profit/Margin = $5,235,215

    • B.

      COP/EBITDA = $1,460,341

    • C.

      Gross Profit/Margin = $5,753,215

    • D.

      COP/EBITDA = $1,604,341

    • E.

      Gross Profit/Margin = $5,624,215

    • F.

      COP/EBITDA = $1,406,341

    Correct Answer(s)
    C. Gross Profit/Margin = $5,753,215
    F. COP/EBITDA = $1,406,341
    Explanation
    The Gross Profit/Margin is calculated by subtracting the Cost of Goods Sold (COGS) from the Net Sales/Revenue. In this case, the Gross Profit/Margin is $5,753,215.

    The COP/EBITDA (Cost of Production/Earnings Before Interest, Taxes, Depreciation, and Amortization) is calculated by subtracting the Fixed Expenses and Variable Expenses from the Gross Profit/Margin. In this case, the COP/EBITDA is $1,406,341.

    Rate this question:

  • 10. 

    GST - Goods and Services Tax - is always included in the Profit and Loss Statement.

    • A.

      True

    • B.

      False

    Correct Answer
    B. False
    Explanation
    The statement is false because GST is not always included in the Profit and Loss Statement. GST is a consumption-based tax that is levied on the supply of goods and services. It is usually collected by businesses on behalf of the government and passed on to the tax authorities. While businesses may include the GST they collect as part of their revenue in the Profit and Loss Statement, the actual GST liability is typically reported separately in the financial statements and paid to the government. Therefore, it is not always included in the Profit and Loss Statement.

    Rate this question:

Quiz Review Timeline +

Our quizzes are rigorously reviewed, monitored and continuously updated by our expert board to maintain accuracy, relevance, and timeliness.

  • Current Version
  • Mar 21, 2023
    Quiz Edited by
    ProProfs Editorial Team
  • Jan 07, 2013
    Quiz Created by
    Gezzar
Back to Top Back to top
Advertisement
×

Wait!
Here's an interesting quiz for you.

We have other quizzes matching your interest.