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

The 20 questions

1. What is calculated by subtracting cost of sales from sales revenue?

   • Total revenue
   • Net profit
   • Operating profit
   • Gross profit

2. What is subtracted from gross profit to calculate net profit?

   • Business expenses
   • Total revenue
   • Raw materials
   • Cost of sales

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 item is included in business expenses when calculating net profit?

   • Raw materials
   • Shop rent
   • Sales revenue
   • Closing stock

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?

   • Taxes are ignored
   • Revenue is added
   • Sales are lower
   • Expenses are deducted

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 profit measure is calculated after deducting overhead expenses?

    • Total revenue
    • Cost of sales
    • Net profit
    • Gross profit

11. Which of these is a direct cost of sales?

    • Shop rent
    • Advertising fees
    • Manager salary
    • Raw materials

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. If revenue stays the same, what causes net profit to fall?

    • Lower expenses
    • Higher expenses
    • Higher revenue
    • Lower material costs

14. What does net profit measure for a business?

    • Production efficiency
    • Overall profitability
    • Marketing reach
    • Sales volume

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 cost reduces net profit without affecting gross profit?

    • Component parts
    • Premises rent
    • Raw materials
    • Direct labour

18. Why might two firms with identical gross profits have different net profits?

    • Different sales
    • Different overheads
    • Different revenues
    • Different stock

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. What can cause a business with high gross profit to still struggle?

    • No employees
    • Low sales
    • High overheads
    • Cheap materials

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