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Explain Profit and Loss Appropriation Account in simply words

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Answer 1

Answer:

The profit and loss (P&L) statement is a financial statement that summarizes the revenues, costs, and expenses incurred during a specified period, usually a fiscal quarter or year.

Answer 2

Solution:-

➜Profit are important part of a business so as its allocation. That is why the profit and loss appropriation account is an important part of an organisation. Profit and loss appropriation account is necessary for business specially partnerships because they have to allocate the net of expenditures and incomes among the various partners.

It is a special account that a firm to show the distribution of profitd /losses as among the partner or partner's capital.

This account should not be confused with the typical profit and loss account but rather seen as an extension of it as it is made after making the profit and loss account.

Purpose:-

overall the firm uses it to solve the allocation and distribution of net profit among the partners, reserves and dividends