well you know and understand each Key Term. q I know and understand this Key Term. q I am still a bit uncertain about what this Key Term means. q I don’t understand this Key Term yet. When you revise each chapter, tick the boxes again to indicate how much you have learned.
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An income statement shows the amount of income earned, expenses incurred and profit made by a business over a certain period of time.
The trading account section of the income statement is used to calculate the gross profit of a business.
The profit and loss account section of the income statement shows how much net profit or net loss has been made.
The appropriation account section calculates the profit retained in the business after dividends to shareholders are paid.
Gross profit is the amount of profit generated before any business expenses are deducted.
Net profit before tax is the final profit after all costs and expenses are deducted.
Revenue (current) expenditure refers to all the day-to-day spending expenses of the business included in the profit and loss account.
Capital expenditure is the spending on fixed assets that are expected to benefit the business for a number of years.
Closing profit and loss reserve is the amount of total profits retained in the business (i.e. not given to shareholders).
q q q q q q q q q q q q q q q q q q q q q q q q Dividends are the portion of the profits paid to shareholders. q q q q q q
