What do you mean by Profit and Loss Account.

1.	What do you mean by Profit and Loss Account.
Answer» Profit and Loss a/c is an account prepared to find out the net profit earned or net loss incurred by a business during an accounting period. It is debited with all operating expenses and losses and credited with incomes and profit. This account begins with the Gross Profit or Gross Loss brought down from Trading A/c. If the total of the credit side of this account is more than the total of the debit side, the difference is net profit. If the total of the debit side exceeds the total of the credit side, the difference is net loss. The amount of net profit or net loss transferred to capital account.

Answer»

Profit and Loss a/c is an account prepared to find out the net profit earned or net loss incurred by a business during an accounting period. It is debited with all operating expenses and losses and credited with incomes and profit. This account begins with the Gross Profit or Gross Loss brought down from Trading A/c.

If the total of the credit side of this account is more than the total of the debit side, the difference is net profit. If the total of the debit side exceeds the total of the credit side, the difference is net loss. The amount of net profit or net loss transferred to capital account.

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