SAP Business One Certification Practice Exam

Which two reports display the balance of the cost of sales accounts?

1. Balance Sheet and Cash Flow

2. Profit and Loss Statement and Trial Balance

3. Cash Flow and Trial Balance

4. Profit and Loss Statement and Balance Sheet

The correct answer is: Profit and Loss Statement and Trial Balance

The Profit and Loss Statement and Trial Balance are the reports that display the balance of the cost of sales accounts. The Profit and Loss Statement, also known as the Income Statement, provides a summary of revenues, expenses, and profits or losses over a specific period. It specifically includes the cost of sales as a line item, reflecting all costs directly associated with providing goods or services sold during that timeframe. This report is essential for assessing the profitability of a business and closely monitors the efficiency of cost management practices. The Trial Balance, on the other hand, is an internal report that lists all the balances of the general ledger accounts at a specific point in time. It serves to ensure that the debits and credits in the accounting system are balanced. The cost of sales accounts appear here as well, providing an overall view of the account balances, including those related to sales costs. While the Balance Sheet relates to the financial position of a company at a specific time, showing assets, liabilities, and equity without detailing specific income or expense accounts, and the Cash Flow statements focus on the inflow and outflow of cash, they do not directly report on the cost of sales accounts in the same way.