Course: P&L Statement 

It can be challenging to gauge the performance of your company.

 

The most important factor when monitoring the success of your company is its financial performance. Regardless of the size of the company, profit and loss statements allow business owners to carefully monitor financial redundancies and make the necessary adjustments.

All of this is done to maintain the profitability and viability of your company.

Your company's long-term profitability and viability can be determined by looking at the various elements that make up a profit and loss statement.

 

A P&L Statement comes with a lot of moving parts from expenditure and revenue, to cost of goods and gross profit. You must carefully consider each of these components if you want your business to succeed. The Profit & Loss Statement guarantees that there won't be any financial hurdles on your path to success!

 

 

 

 

 

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Which name from the list below is NOT related to the income statement?

1

P & L

2

Statement of Financial Position

3

Statement Of Operations 1 / 7

Earnings from a business's primary operations are referred to as __________.

1

Revenues

2

Gains 2 / 7

Revenues are recognized in the accounting period in which _________ under the accrual basis of accounting.

1

Cash Is Received

2

Revenues Are Earned 3 / 7

Net Sales minus the Cost of Goods Sold is __________.

1

Gross Profit

2

Income From Operations

3

Net Income 4 / 7

Which accounting method best captures profitability over a brief period of time?

1

Accrual Basis

2

Cash Basis 5 / 7

Does the income statement have to include the earnings per share if the company's stock is traded publicly?

1

Yes

2

No 6 / 7

Should some of the expenses listed on the revenue statement be considered estimates?

1

Yes

2

No 7 / 7 Error Occured Prev. Next

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You’ve caught up on everything you need to know to draft your first P&L Statement.

 

But it’s not enough! How does it apply to a big company? Or a small company? All these questions and more are answered in this video, where we break down two hypothetical companies’ P&L Statements, compare, and analyse key features.

The profit and loss account is the foundation of an income statement.

1

True. The statement is true, it can also be called a profit and loss statement.

2

False 1 / 7

A balance sheet is similar to a snapshot of a business taken at a particular period.

1

True. A balance sheet is often described as a ‘snapshot’ of a company’s financial position.

2

False 2 / 7

The amount of cash (or cash equivalents) that enters and leaves a corporation is shown on the profit and loss statement.

1

True

2

False. A profit and loss statement shows a company’s income and expenditure over a specified period of time. 3 / 7

A dairy company would value a high inventory turnover rate more than a jewelry store.

1

True.

2

False 4 / 7

You may calculate a company's net value with the support of Profit and Loss Statements.

1

True. A cash flow statement shows the cash coming in and leaving the company during a particular period of time; it shows the cash position of the company. The Profit and Loss statement reflects net worth or profitability.

2

False 5 / 7

Profit and Loss Statement is a financial statement compiled by businesses only at the end of a fiscal or trading year.

1

True

2

False. You can determine if you want to draft a Profit and Loss Statement at the end of a month, quarter, or year. 6 / 7

COGS (or Cost of sales when referring to services) is calculated using the following formula:

1

= Opening stock + Purchases - Closing stock

2

= Sales revenue – Cost of goods sold 7 / 7 Error Occured Prev. Next