Question

Give two differences between Profit and Loss Account and Profit and Loss
Appropriation Account.

Answer 1

Answer:

Profit and loss appropriation account is an extension of the profit and loss account itself, however, there is a fundamental difference between profit and loss & profit and loss appropriation account.

By definition, a P&L account or Income statement is one of the three financial statements of an organization which summarizes revenues and expenses to ascertain net profit or a net loss of the organization for a specific time period.

By definition, a P&L appropriation account is used to demonstrate division or allocation of profit/losses among the owners.