What this practice covers
These questions are drawn from past CIE 0264 Business papers and filtered to profit and loss. You answer, you find out immediately whether you were right, and you get the reasoning for the correct option and for each distractor. Wrong answers go to a mistakes locker so you can come back to exactly those.
Practice is free. You need an account only so your progress and your mistakes are still there next time.
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What examiners see students get wrong here
These are the errors that cost marks on profit and loss, taken from our own topic notes. Read them before you practise and you will recognise the traps in the questions.
- Using the word profit when you mean revenue. Revenue is everything that came in; profit is what survived the costs.
- Taking expenses off revenue instead of off gross profit.
- Adding gross profit and profit together. Profit is part of gross profit, not an extra amount beside it.
- Putting the purchase of a machine into the statement as a cost, or a bank loan into it as revenue. Neither belongs there.
- Calling a wage an expense without checking. Production wages are part of cost of sales; office salaries are expenses.
- Giving a bare number with no dollar sign, or a percentage where the question asked for an amount.
- Saying a business with a profit must have money in the bank.
- Answering "why is profit important" by saying the owner can spend it, and stopping there. Name the reason 0264 gives and take it forward.
Revise it first
If any of the above is unfamiliar, work through the notes before practising: Profit and loss revision notes.