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Running a business means you'll need to understand profit and loss.

# Business Math 08 - Understanding Profit and Loss

This Math quiz is called 'Business Math 08 - Understanding Profit and Loss' and it has been written by teachers to help you if you are studying the subject at middle school. Playing educational quizzes is a fabulous way to learn if you are in the 6th, 7th or 8th grade - aged 11 to 14.

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When you have a business and you sell a product or service, in order to survive in that business you must first be able to pay for your overhead costs, make enough to pay your employees and, finally, make enough to pay yourself. In order to do this, you must make a profit. A profit is the gain on an investment.

1.
In order to stay in business, a business must be able to ________.
have deep discounts
make a profit
get a bank loan
sell products cheaply
2.
A profit is a _________.
gain on investment
sale on a unit piece
the store owner's salary
A profit is a gain on investment. Answer (a) is the correct answer
3.
The gross profit is ________.
calculated by subtracting the costs of operating the business
the total amount of all sales of goods
the amount left over after deducting for overhead costs
the total amount of a sale of a product minus the initial cost of the product
The gross profit is the total amount of a sale of a product minus the initial cost of the product. Answer (d) is the correct answer
4.
The price of each piece of goods is known as the ________.
gross cost
total cost
unit cost
sale's cost
The price of each piece of goods is known as the unit cost. Answer (c) is the correct answer
5.
Rent, electricity, heat, water and sewer, telephone, advertising, supplies (hangers, tags, etc.), insurance, a security system and salaries are all _________.
operating costs
parts of the gross profit
included in the profit
Rent, electricity, heat, water and sewer, telephone, advertising, supplies (hangers, tags, etc.), insurance, a security system and salaries are all operating costs. Answer (a) is the correct answer
6.
The net profit is _____________.
the cost of goods minus the costs of operating the business
the gross profit minus the costs of operating the business
the inventory of goods minus the costs of operating the business
the sum left to pay overhead expenses
The net profit is the gross profit minus the costs of operating the business. Answer (b) is the correct answer
7.
The difference between the gross profit and the operating expenses when the operating expenses are greater than the gross profit is known as _______.
a net profit
a gross loss
a net loss
a unit cost
A net loss is the difference between the gross profit and the operating expenses when the operating expenses are greater than the gross profit. Answer (c) is the correct answer
8.
Another important part of having a successful business is to always maintain a positive flow of ________.
cash flow
employees
goods
inventory
Another important part of having a successful business is to always maintain a positive flow of inventory. Answer (d) is the correct answer
9.
If customers will not buy a product at a certain cost, the store owner is forced to _______.
operate at a net loss
return the product to the vendor
destroy the product
lower the price
If customers will not buy a product at a certain cost, the store owner is forced to lower the price. Answer (d) is the correct answer
10.