A Visit to cloth merchant who is maintaining his books of accounts under single entry system. preparation of statement of affairs & statement of profit & Loss from the data collected
Answers
Statement of Profit and Loss
Explanation:
Profit & Loss Statement for Company ABC, for the year ended July 31, 2019.
Total Revenue $100,000
Cost of Goods Sold ($ 20,000)
Gross Profit $ 80,000
(less)Operating Expenses
Salaries $15,000
Rent $10,000
Utilities $10,000
Total Operating Expenses ($ 30,000)
Net Profit $ 30,000
Meaning of Terms
Gross Profit: This a term which can be described as a profit or loss which is made after deducting the basic costs of selling certain goods and services.
Net profit: This is the profit made after operational expenses of a business are deducted from the gross profit made by the company.
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