Question

difference between profit and loss account and profit and loss a appropriation account ​

Answer 1

profit and loss account is prepared after the trading account and a profit and loss appropriate account is prepared in not for profit concern

Answer 2

Answer:

Explanation:

Profit and Loss Account: -

Profit and Loss Account is not prepared on the basis of Partnership Deed, except for interest on loan from partners.

Profit and Loss Account follows matching principle, i.e., matching revenue against expenses.

Items debited to Profit and Loss Account is charge against profit.

Profit and Loss Account is prepared to ascertain the net profit or net loss of the organization for the accounting year.

Profit and Loss Appropriation Account: -

Profit and Loss Appropriation Account is prepared on the basis of the Partnership Deed.

Profit and Loss Appropriation Account does not follow matching principle.

Items debited to Profit and Loss Appropriation Account is appropriation of profit.

Profit and Loss Appropriation Account is prepared to appropriate the net profit.

Profit and Loss Appropriation Account is prepared after Profit and Loss Account.