Lesson 6.2.3

6.2.3 Income Statement (Profit and Loss Account) Quiz: NCFE Business & Enterprise, Unit 6

20 questions · by Revision Ninja

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This free Income Statement (Profit and Loss Account) quiz has 20 multiple choice questions for the NCFE Level 1/2 Technical Award in Business and Enterprise (NCFE Business & Enterprise), Unit 6: Finance. It covers lesson 6.2.3, Income Statement (Profit and Loss Account), one of the ready-made revision sets written with Revision Ninja and organised by unit on Qwiz Rush.

Use it as a starter, a plenary or an end-of-unit check: host it live on the board and students join with a game code on their own devices — no student accounts and nothing to install — or set it for independent revision with Free Play, where each student works through the questions alone.

Every question runs on a 20-second countdown and the fastest correct answers score the most. All the questions and their choices are listed below so you can see what the quiz covers; the answers are revealed in the game. Want to change something? Make your own copy and edit it in your library.

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The 20 questions

  1. A shop has sales revenue of £90,000, cost of sales of £40,000 and expenses of £20,000. What is its gross profit?

    • £70,000
    • £130,000
    • £50,000
    • £30,000

  2. Which figure is shown first, at the very top of an income statement?

    • Gross profit
    • Net profit
    • Cost of sales
    • Sales revenue

  3. A bakery is working out its cost of sales. Which item should it include?

    • The interest paid on the bank loan
    • The cost of advertising in the paper
    • The rent paid on the bakery shop
    • The flour used to bake the bread

  4. Which calculation gives a business its gross profit?

    • Sales revenue - cost of sales
    • Gross profit - expenses
    • Sales revenue - cost of sales - expenses
    • Sales revenue - expenses

  5. Which of these is NOT treated as an expense on an income statement?

    • Salaries of admin staff
    • Cost of raw materials
    • Rent on the head office
    • Advertising in a magazine

  6. What does the net profit figure on an income statement show?

    • Sales revenue before any costs are taken off
    • What is left after all costs are taken off
    • The cash sitting in the bank at year end
    • What is left after direct costs are taken off

  7. Why would a bank study a business's income statement before agreeing a loan?

    • To check how much tax the business owes
    • To see if profits can cover the repayments
    • To see how much cash is in the bank today
    • To list the assets the business owns

  8. Which figure on an income statement is often called 'the bottom line'?

    • Net profit
    • Sales revenue
    • Gross profit
    • Total expenses

  9. An income statement is also known by which other name?

    • Statement of financial position
    • Profit and loss account
    • Balance sheet
    • Cash flow forecast

  10. Which of these does an income statement report?

    • Assets and liabilities on a single date
    • Cash paid in and out over a period
    • Sales forecasts for the year ahead
    • Revenue and costs over a period of time

  11. Which of these shows the correct order of the main lines in an income statement?

    • Sales revenue, cost of sales, gross profit, expenses, net profit
    • Sales revenue, cost of sales, net profit, expenses, gross profit
    • Sales revenue, gross profit, cost of sales, net profit, expenses
    • Sales revenue, expenses, net profit, cost of sales, gross profit

  12. A firm sells goods for £50,000. Those goods cost £30,000 to make. What is its gross profit?

    • £50,000
    • £80,000
    • £20,000
    • £30,000

  13. In the income statement layout, which of these is deducted from revenue before gross profit is worked out?

    • Advertising costs
    • Rent and rates
    • Cost of sales
    • Salaries and wages

  14. A business has a gross profit of £30,000 and a net profit of £10,000. What were its total expenses?

    • £20,000
    • £40,000
    • £30,000
    • £10,000

  15. An income statement shows how a business performed over which of these time frames?

    • Every year since it opened, added together
    • A single date, showing what the firm owns
    • The twelve months ahead, as a profit forecast
    • A set trading period, usually one year

  16. A business wants to check how much profit it made last year. Which document should it look at?

    • The break-even chart
    • The balance sheet
    • The income statement
    • The cash flow forecast

  17. A café keeps its sales revenue the same but buys its ingredients more cheaply. Which of these follows?

    • Cost of sales falls, so gross profit rises
    • Expenses fall, so gross profit is unchanged
    • Cost of sales falls, so gross profit falls
    • Gross profit rises but net profit is unchanged

  18. A business reports a net loss for the financial year. What does this tell you?

    • Its expenses were greater than its revenue
    • Its revenue was greater than its expenses
    • It ran out of cash before the year ended
    • Its revenue and expenses were exactly equal

  19. A shop puts its prices up and the number of items bought stays the same. Which income statement line changes first?

    • Overhead expenses
    • Cost of sales
    • Sales revenue
    • Interest paid

  20. A firm has sales revenue of £250,000, cost of sales of £120,000 and expenses of £80,000. What is its net profit?

    • £50,000
    • £170,000
    • £40,000
    • £130,000