Arrange the following items related to the Statement of Profit and Loss in a sequence:
(A) Profit before extraordinary items and tax
(B) Profit before tax
(C) Cost of materials consumed
(D) Revenue from operations
Choose the correct answer from the options given below:
Answer & explanation
Correct answer: option 4
The correct answer is Option (4) → (D), (C), (A), (B)
The Statement of Profit and Loss starts with income, deducts expenses, and then works down through the profit lines.
(D) Revenue from operations — first: the statement begins with income.
(C) Cost of materials consumed — next: the first of the expenses deducted from the revenue.
(A) Profit before extraordinary items and tax — then: struck after the expenses and exceptional items.
(B) Profit before tax — last of these: it comes only after the extraordinary items are dealt with.
NCERT (2026-27 edition):
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