Accounting – 2.2 Business documents | e-Consult
2.2 Business documents (1 questions)
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Five items to include in Sarah's Pro-Forma Profit and Loss Account are:
- Sales Revenue: The total income generated from selling the custom-made gifts.
- Cost of Goods Sold (COGS): The direct costs associated with producing the gifts, including materials and direct labour.
- Gross Profit: Calculated as Sales Revenue minus COGS. This shows the profit before other expenses.
- Operating Expenses: Costs incurred in running the business, such as rent (if applicable), utilities, marketing, and administrative expenses.
- Depreciation: The allocation of the cost of any assets (e.g., equipment) over their useful life.
- Profit Before Tax: Gross Profit minus Operating Expenses and Depreciation.