School: Teacher: Diaa Elsadek
Student Name:
OL- Accounting: Income statement for sole trader
Question – 1:
Insert the missing words and figures into the following income statement
Malak Company
Income statement for the year ended 31 March 2018
$ $
Sales revenue 120,700
Sales return (700)
Net sales A
Cost of goods sold (cost of sales):
Inventory at B 7,000
Purchases 70,000
Purchases return (500)
Carriage inward 1,500
Closing inventory (21,000) C
Gross profit D
Other income (other revenue):
Discount received 1,000
Interest received E 1,500
Total income F
Operating expenses:
Utilities 10,000
Discount allowed 100
Wages 20,000
Advertising 5,000
Carriage outwards 1,000
Office expenses 4,000
Commission paid 9,000 (49,100)
Net profit before tax 15,400
Corporate tax ($18,400 x 10%) (1,540)
G H
Answer
Item Figure or words
A ………………………………………………………………………………………………………..……………………………………………………………………………
B ………………………………………………………………………………………………………..……………………………………………………………………………
C ………………………………………………………………………………………………………..……………………………………………………………………………
D ………………………………………………………………………………………………………..……………………………………………………………………………
E ………………………………………………………………………………………………………..……………………………………………………………………………
F ………………………………………………………………………………………………………..……………………………………………………………………………
G ………………………………………………………………………………………………………..……………………………………………………………………………
H ………………………………………………………………………………………………………..……………………………………………………………………………
Diaa El-Sadek 0122 345 40 38 – 010 900 34 302 [email protected] page – 1
Question – 2:
a) State the purpose of preparing an income statement. [1] 11/M/J/11 Question 2 (b)
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b) In which final account will carriage inwards be shown? [1] 11/M/J/10 Question 2 (e)
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c) Name the final account in which discount allowed be shown? [1] 12/M/J/10 Question 2 (d)
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Question – 3:
For each question, there are four possible answers A, B, C and D. Choose the one you consider correct.
1. What is an income statement (profit and loss account)?
A A list of all the assets and liabilities of a business at a particular date
B A list of all the balances in the ledger accounts of a business at a particular date
C A statement of receipts and payments of a business during a particular period
D A summary of income and expenditure of a business during a particular period
11/M/J/10 Question 1 (f)
2. A sole trader compares his results with those of a similar business. Which shows how well expenses are being
controlled?
A Bank balance B Cost of sales C Gross profit D Net profit
11/M/J/10 Question 1 (j)
3. A trader must record all the financial information about her business if she wants to know the amount of
A her bank balance
B her debtors
C her drawings
D her profit
01/M/J/03 Question 1
4. What is net profit?
A the amount of money taken out of the business by the owner during the year
B the cash in the business bank account
C the difference between sales and cost of sales
D sales revenue less cost of sales and expenses
01/M/J/03 Question 2
5. Which appears in both the Trading Account and the Profit and Loss Account?
A cost of sales B gross profit C net profit D sales
01/M/J/03 Question 4
6. Karl’s trial balance for 31 December 2009 includes the following balances.
$
sales 3,200
inventory (stock) at 1 January 2009 200
purchases 1,800
expenses 800
Karl’s inventory (stock) at 31 December 2009 was $300. What is Karl’s net profit for the year?
A $400 B $500 C $700 D $1,500
11/O/N/10 Question 1 (e)
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7. Which would appear in an income statement?
A bank overdraft
B capital introduced
C motor vehicle expenses
D trade receivables
13/M/J/12 Question 1 (h)
8. A trader wishes to know the cost of goods sold during the year. Which financial statement will provide the answer?
A balance sheet B profit and loss account C trading account D trial balance
Question – 4:
The following balances extracted from El-Glad Company at the year ended 31 December 2019
Sales revenue $150,800 – Inventory at 1 January 2009 $7,000 – Purchases $70,000 – electricity $4,000 – Carriage inward
$1,000 – Inventory at 31 December 2009 $20,000 – sales return $800 –– discount allowed $400 – Salaries 20,000 – Carriage
outwards $1,000 – rent paid $6,000. Prepare the income statement for El-Glad Company at the year ended 31
December 2019
Answer
El-Glad Company
Income statement for the year ended 31 December 2019
$ $
Sales revenue
Sales return
Net sales
Cost of goods sold (cost of sales):
Inventory at B
Purchases
Carriage inward
Closing inventory
Gross profit
Operating expenses:
Electricity
Discount allowed
Salaries
Carriage outwards
Rent paid
Net Profit
Question – 5:
Insert the missing words and figures into the following income statement
Mariam Company
Income statement for the year ended 31 March 2018
$
Sales revenue 120,000
Less: A 80,000
Gross profit B
Add: Other Income 1,000
Total income 41,000
Less: Expenses: 21,000
Net profit C
Answer
Item Figure or words
A ………………………………………………………………………………………………………..……………………………………………………………………………
B ………………………………………………………………………………………………………..……………………………………………………………………………
C ………………………………………………………………………………………………………..……………………………………………………………………………
Diaa El-Sadek 0122 345 40 38 – 010 900 34 302 [email protected] page – 3
