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Introduction

Study the image showing the formula used to calculate gross profit and answer the question that follow.

True-False Question

Read the statements below and tick true or false if the statements are true or false about gross profit

Question 1

Is opening stock one of the items used in drawing the trading account?

Question 2

It is impossible to draw the trading account if net sales is not provided

Question 3

Opening stock must be provided in order to be able to calculate the gross profi

Question 4

Net profit can only be calculated if the gross profit and expenses are known

Question 5

It is impossible to draw the profit and loss account if the expenses and revenues are not provided

Question 6

The profit and loss account can be prepared before the trading account has been prepared