Question

Excess of debit in profit and loss account is called

Answer 1

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It is called as "net loss".

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Answer 2

Excess of debit in profit and loss account is called net loss.

It is also known as net income or net operating loss.

• Net loss = Total revenues- total expenditure(cost of goods sold+other expenses)
• Following events lead to net loss-

1. failed marketing strategy
2. unable to cope up with market demand
3. inefficiency

• Net loss is different from gross loss as gross loss is revenue minus only cost of goods sold.