Companies: Financial Statements is one of 9 topics in the Grade 12 Accounting CAPS syllabus, covered across 3 lessons on Study Vault. Below are real practice questions from this topic with full worked answers.
Sample practice questions
Easy
1. Gross profit is calculated as:
Sales minus Cost of Sales
Sales minus Operating Expenses
Sales plus Cost of Sales
Operating Profit minus Interest Expense
Answer: Sales minus Cost of Sales — Gross Profit = Sales - Cost of Sales, the profit made purely from trading before any operating expenses are considered.
Easy
2. Discount received from a creditor is classified in the Income Statement as:
Other income
An operating expense
A finance cost
A reduction of sales
Answer: Other income — Discount received reduces the amount owed to a creditor, effectively creating a gain for the business, so it is recorded as other (operating) income.
Medium
3. A company had Sales of R850 000 and Cost of Sales of R510 000. Calculate the gross profit in rand.
