Revenue and costs

• Economie
• Middelbare school
• vwo
• Leerjaar 3

Profit and loss account

Profit and loss account

The selling costs are highly dependent on the turnover

General costs are not or a lot less dependent on the turnover (they are partly fixed costs) and so cannot be calculated based on the expected turnover

Profit and loss account

Costs	Revenue
Purchase value of turnover €200,000	Turnover €260,000
General costs €10,000
Selling costs €25,000
Depreciation €5,000
Profit €20,000
Total €260,000	Total €260,000

Profit and loss budget

Turnover

- Costs of sales 

-------------------

= Gross profit

- Operating costs

-----------------------

= Net profit

Balance sheet

Assets - debts = equity

900 - 400 = 500

Assets			Debts
Inventory	€ 500	Equity	€ 500
Goods	€ 300	Bankloan	€ 300
Cash	€ 100	Creditors	€ 100
Total	€ 900	Total	€ 900

Expenditure and costs

Expenditure = uitgave             Cost = kosten

You buy a car of € 15,000. You pay cash. This is an expenditure.

It's not a cost. 

Assets			Debts
Car	+ € 15,000
Cash	- € 15,000

Effect of a purchase of a fixed asset

The total amount of assets doesn't change. The equity remains the same

Assets			Debts
Car	+ € 15,000
Cash	- € 15,000

Example of car related costs

You have to pay insurance premium € 25 per month by bank.

This is a cost. You spend € 25 and do not get a asset in return.

Total amout of assets decreases. Equity decreases as well.

This is also an expenditure

Assets

Debts

Example of car related costs

You have to pay insurance premium € 25 per month by bank.

This is a cost. You spend € 25 and do not get a asset in return.

Total amout of assets decreases. Equity decreases as well.

This is also an expenditure

Assets			Debts
Bank	- € 25	Equity	- € 25

Another example of expenditure but not a cost: purchase of goods

Jimmie purchases goods (butter, lettuce) for an amount of 

€ 50. He doesn't pay in cash but receives a bill

Equity is not affected. Total assets increase but debts also increase. 

Assets

Debts

Another example of expenditure but not a cost: purchase of goods

Jimmie purchases goods (butter, lettuce) for an amount of 

€ 50. He doesn't pay in cash but receives a bill

Equity is not affected. Total assets increase but debts also increase. 

Assets			Debts
Goods	+ € 50	Creditors	+ € 50

What is missing here?

Costs	Revenue
Purchase value of turnover €200,000	Turnover €240,000
General costs €10,000
Selling costs €25,000
Depreciation €5,000
Total €240,000	Total €240,000