Question

Prepare the format of statement of Profit and Loss and explain its items.

Answer 1

Answer:

Explanation:

                                                FORMAT OF PROFIT

                                                 & LOSS STATEMENT

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

EXPLANATION 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.