What does the statement of comprehensive income show?

It shows a business's revenues, costs, and resulting profit or loss over a specific accounting period.

What does revenue (also called turnover or sales) represent in the statement of comprehensive income?

Revenue represents the total income generated from the sale of goods or services during the accounting period.

What is cost of sales in the statement of comprehensive income?

Cost of sales is the direct costs attributable to producing the goods or services sold, such as raw materials and direct labour.

What are operating expenses in the statement of comprehensive income?

Operating expenses are the indirect costs of running the business, such as rent, utilities, salaries, and marketing costs.

How is interest shown in the statement of comprehensive income?

Interest represents the cost of borrowing (interest payable) or income from investments (interest receivable), deducted or added after operating profit.

What does tax represent in the statement of comprehensive income?

Tax represents the corporation tax liability calculated on the business's taxable profits for the period.

Edexcel A-Level Business 9BS0

Meeting Customer Needs

Topic overview The market Market research Market positioning

The Market

Topic overview Demand Supply Markets Price elasticity of demand Income elasticity of demand

Marketing Mix and Strategy

Topic overview Product/service design Branding and promotion Pricing strategies Distribution Marketing strategy

Managing People

Topic overview Approaches to staffing Recruitment, selection and training Organisational design Motivation in theory and practice Leadership

Entrepreneurs and Leaders

Topic overview Role of an entrepreneur Entrepreneurial motives and characteristics Business objectives Forms of business Business choices Moving from entrepreneur to leader

Raising Finance

Topic overview Internal finance External finance Liability Planning

Financial Planning

Topic overview Sales forecasting Sales, revenue and costs Break-even Budgets

Managing Finance

Topic overview Profit Liquidity Business failure

Resource Management

Topic overview Production, productivity and efficiency Capacity utilisation Stock control Quality management

External Influences

Topic overview Economic influences Legislation The competitive environment

Business Objectives and Strategy

Topic overview Corporate objectives Theories of corporate strategy SWOT analysis Impact of external influences

Business Growth

Topic overview Growth Mergers and takeovers Organic growth Reasons for staying small

Decision-Making Techniques

Topic overview Quantitative sales forecasting Investment appraisal Decision trees Critical Path Analysis

Influences on Business Decisions

Topic overview Corporate influences Corporate culture Shareholders versus stakeholders Business ethics

Assessing Competitiveness

Topic overview Interpretation of financial statements Ratio analysis Human resources

Managing Change

Topic overview Causes and effects of change Key factors in change Scenario planning

Globalisation

Topic overview Growing economies International trade and business growth Factors contributing to increased globalisation Protectionism Trading blocs

Global Markets and Business Expansion

Topic overview Conditions that prompt trade Assessment of a country as a market Assessment of a country as a production location Reasons for global mergers or joint ventures Global competitiveness

Global Marketing

Topic overview Marketing Niche markets Cultural/social factors

Global Industries and Companies

Topic overview The impact of MNCs Ethics Controlling MNCs

Assessing Competitiveness

Interpretation of financial statements

9 things to know
Paper 2 and Paper 3

Overview

The statement of comprehensive income and the statement of financial position, the accounting equation, and what each line in them represents.

What you need to know

Answer each one before you reveal it.

Your recallNot started

Key term

What are revenue, cost of sales and operating expenses?

Numbers

How are operating profit and net profit found?

Key term

What does the statement of financial position show, and what is the accounting equation?

Key term

Why must the accounting equation balance, and what are non-current assets?

Key term

What are trade payables, cash equivalents and short-term borrowings?

Key term

What is the relationship between net assets and equity?

Key term

What is the key difference between the statement of comprehensive income and the statement of financial position in terms of time?

Numbers

State the net-assets formula.

Numbers

State the working-capital formula.

Questions from this subtopic

Each one with the model answer underneath.

1
What does the statement of comprehensive income show?
Model answer
It shows a business's revenues, costs, and resulting profit or loss over a specific accounting period.
2
What does revenue (also called turnover or sales) represent in the statement of comprehensive income?
Model answer
Revenue represents the total income generated from the sale of goods or services during the accounting period.
3
What is cost of sales in the statement of comprehensive income?
Model answer
Cost of sales is the direct costs attributable to producing the goods or services sold, such as raw materials and direct labour.
4
What are operating expenses in the statement of comprehensive income?
Model answer
Operating expenses are the indirect costs of running the business, such as rent, utilities, salaries, and marketing costs.
5
How is interest shown in the statement of comprehensive income?
Model answer
Interest represents the cost of borrowing (interest payable) or income from investments (interest receivable), deducted or added after operating profit.
6
What does tax represent in the statement of comprehensive income?
Model answer
Tax represents the corporation tax liability calculated on the business's taxable profits for the period.

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Net gain = − initial cost.

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AGross profit equals revenue minus cost of sales.

BOperating profit equals gross profit minus operating expenses.

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Tariff means a tax imposed on imported goods.

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