Bill, Profit and Loss

Cost Price:

• The amount at which a product is purchased or bought.

Selling Price:

• The amount at which a product is sold.
• It may be more than (>), equal to (=), or less than (<) the cost price of the product.

Example:

Richard buy a pen at ₹ 50. He sold this pen to his friend Manav at ₹ 40.

So here, Cost price of the pen for Richard = ₹ 50.

Selling price of the pen for Richard = ₹ 40.

What is the Bill?

• A slip of paper in which a shopkeeper notes down the requirements of a customer or buyer and calculates the total cost of items purchased is called a Bill.
• A shopkeeper can keep track of the day sales.
• The customer can come across and check the prices of items purchased and their total cost.
• In case of any problem, the customer can change the item easily by showing the bills.

How to read a bill?

• Name and address of the shop, phone number and date of purchase of items are mentioned on the bill.
• Following columns mentioned:
1. Item number
2. Name of the item
3. Quantity of the item
4. Rate of each item
5. Total amount of the item.
• Shopkeeper enters the name of the item, rate, and quantity in the bill.
• He calculates the amount for each item by multiplying the rate by quantity.
• Finally, at the end, total cost of all items purchased is mentioned in the bill.

• From the above bill, we can find that Ronita purchased:
• 2 kg Rice
  Rate of 1 kg Rice = ₹ 45.
  Cost of 2 kg Rice = 2 × 45 = ₹ 90
• 1 kg oil
  Rate of 1 kg oil = ₹ 150
  Cost of 1 kg oil = ₹ 150
• 1 kg Lentils = ₹ 90
  Rate of 1 kg lentils = ₹ 90
  Cost of 1 kg Lentils = ₹ 90
  So, the total cost of all items purchased by Ronita:
  = ₹ 90 + ₹ 150 + ₹ 90 = ₹ 330

Profit and Loss

• Profit means gaining money after selling a product.
• Loss is the opposite of profit. Loss means losing money after selling a product.
• There are some terms related to profit and loss. These are Cost price (or production cost) and Selling Price.

Rules of Profit and Loss:

• If the selling price is greater than the cost price, then it’s a profit.

Example:

The shopkeeper bought a notebook for ₹ 20 and sell it for ₹ 25. How much profit has he gained?

Answer:

Cost Price = ₹ 25
Selling Price = ₹ 20
Since, 25 > 20
So, Profit = ₹ 25 – ₹ 20 = ₹ 5
Hence, the shopkeeper gained a profit of ₹ 5.

• If the Selling price is less than then the cost price, then it’s a loss.

Example:

Raju bought a cycle for ₹ 850 and sell it for ₹ 750 after one year. Find his overall profit or loss.

Answer:

Cost Price = ₹ 850
Selling Price = ₹ 750
Since, 750 < 850
So, loss = ₹ 850 – ₹ 750 = ₹ 100
Hence, the Raju has loss of ₹ 100.