Profit And Loss Account: Meaning/Definition - SS1 Accounting Past Questions and Answers - page 1
1
What is the purpose of a profit and loss account?
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A
To show a company's assets and liabilities
B
To show a company's revenue and expenses
C
To show a company's cash flow
2
What does a company deduct from its revenue in a profit and loss account?
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A
Its assets
B
Its expenses
C
Its liabilities
3
If a company's expenses are greater than its revenue in a profit and loss account, what does it mean?
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A
The company made a profit
B
The company made a loss
C
The company broke even
4
What is the difference between revenue and profit in a profit and loss account?
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A
Revenue is the total amount of money a company made during a period, and profit is the money left over after deducting expenses.
B
Revenue is the total amount of money a company made during a period, and profit is the total amount of money a company has.
C
Revenue and profit are the same thing.
5
What is the use of a profit and loss account?
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A
To analyze a company's financial performance
B
To record a company's cash transactions
C
To show a company's balance sheet
6
What is the other name for a profit and loss account?
Â
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7
How is a company's net profit or loss calculated in a profit and loss account?
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