Lesson 2.4.1a

2.4.1a Gross profit and net profit Quiz: Pearson Edexcel Business, Unit 9

20 questions

Written by Revision Ninja · Last reviewed 11 October 2026

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Lesson 2.4.1a, Gross profit and net profit: 20 multiple choice questions for the Pearson Edexcel GCSE Business (1BS0), Unit 9: Making financial decisions, written with Revision Ninja.

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The 20 questions

  1. What is gross profit?

    • The total amount of money held in the business bank account
    • Sales revenue minus all business expenses including rent and wages
    • Total profit after tax has been paid to the government
    • Sales revenue minus the cost of sales

  2. What is net profit?

    • Gross profit minus expenses such as rent, wages and marketing
    • The price paid to buy the business's stock from suppliers
    • The total value of the assets owned by the business at year end
    • Sales revenue minus the cost of sales for the year

  3. A business has revenue of £50,000 and cost of sales of £30,000. What is its gross profit?

    • £80,000
    • £20,000
    • £30,000
    • £15,000

  4. A business has gross profit of £20,000 and expenses of £12,000. What is its net profit?

    • £12,000
    • £20,000
    • £32,000
    • £8,000

  5. A business has revenue of £120,000, cost of sales of £70,000 and expenses of £25,000. What is its net profit?

    • £50,000
    • £95,000
    • £25,000
    • £70,000

  6. Which of these would be included in a business's expenses when calculating net profit?

    • The cost of the goods that were sold to customers
    • Rent for the shop premises
    • The revenue earned from sales during the year
    • The value of the stock that is still held at year end

  7. A business has sales of £80,000 and a cost of sales of £52,000. Which is its gross profit?

    • £52,000
    • £28,000
    • £132,000
    • £80,000

  8. Why is net profit usually lower than gross profit?

    • Gross profit includes the value of assets that are not sold
    • Expenses are added to gross profit to reach net profit
    • Net profit only counts cash sales, so it is always lower
    • Expenses are deducted from gross profit to reach net profit

  9. A business has a gross profit of £45,000 and wages of £18,000 and rent of £7,000 as expenses. What is its net profit?

    • £70,000
    • £45,000
    • £20,000
    • £25,000

  10. Which pair correctly describes gross profit and net profit?

    • Gross profit and net profit are always the same figure for any business
    • Gross profit is after tax; net profit is before tax in every case
    • Gross profit is before overheads; net profit is after overheads
    • Gross profit is after overheads; net profit is before overheads

  11. Which is an example of a cost of sales?

    • The rent paid for the head office building in the city
    • The cost of advertising on local radio throughout the year
    • The salary of the business's accountant each month
    • The raw materials used to make the product that was sold

  12. A business has revenue of £60,000 and a gross profit of £35,000. What is its cost of sales?

    • £35,000
    • £95,000
    • £60,000
    • £25,000

  13. A business's net profit falls from £15,000 to £9,000 while revenue stays the same. What is the most likely cause?

    • Revenue has risen by £6,000 with no change to expenses
    • Expenses have risen by £6,000
    • Cost of sales has fallen by £6,000 with no other change
    • Gross profit has risen by £6,000 with no change to expenses

  14. Why would a business want to calculate both gross and net profit?

    • Gross profit is required by law but net profit is only used for internal decisions
    • Gross profit shows production efficiency while net profit shows overall profitability
    • Net profit is only useful if the business has no expenses to pay
    • Gross profit tells the business how much tax it owes to the government

  15. A business's cost of sales is £40,000 and its revenue is £64,000. What is the gross profit?

    • £64,000
    • £40,000
    • £24,000
    • £104,000

  16. A business has gross profit of £18,000, expenses of £9,500 and tax of £2,000. What is net profit before tax?

    • £27,500
    • £8,500
    • £6,500
    • £18,000

  17. Which of these is most likely to reduce a business's net profit but not its gross profit?

    • A fall in the cost of sales per unit produced
    • An increase in the rent paid for its premises
    • An increase in the price of raw materials used in production
    • A rise in the number of units sold at the same price

  18. Why might two businesses with the same gross profit have very different net profits?

    • Gross profit is always identical for any two businesses in a market
    • They may have different levels of overheads such as rent and wages
    • Net profit is decided only by how much the business pays its suppliers
    • Gross profit includes all the costs that net profit later deducts

  19. A business has revenue of £250,000 and net profit of £40,000. Its expenses are £60,000. What is its cost of sales?

    • £150,000
    • £190,000
    • £210,000
    • £100,000

  20. Explain why a business might still struggle even when its gross profit is high.

    • High gross profit means that customers are always satisfied with the product
    • High gross profit means the business always pays no tax at all
    • High overheads can reduce net profit to a low or negative figure
    • High gross profit means the business has no need to control its costs

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