Income statements: Practice Questions

Which of the following best explains why a business might show a profit on its income statement but have a cash deficit in its bank account?

An enterprise sells 800 units of a product at a price of \$25 each. The variable cost is \$10 per unit, and total fixed costs are \$6,000. Calculate the profit for the year.

Consider the following financial data for an enterprise:
- Profit for the year: \$15,000
- Total Expenditure (Expenses): \$8,000
- Cost of Sales: \$12,000
What was the total Revenue for this enterprise?

An enterprise decided to switch to a cheaper supplier for its raw materials. Assuming the selling price and the number of units sold remain constant, how will this change affect the income statement?

According to the syllabus guidance, what is a primary reason for an entrepreneur to keep accurate financial records, such as an income statement?

Identify two internal stakeholders who would use an enterprise's income statement.

Explain the primary purpose of an income statement for potential investors of a limited company.

If an enterprise increases its selling price by \(10\%\) but its Cost of Goods Sold remains unchanged, explain the resulting effect on the Gross Profit Margin.