Question

Various heads under which profits are usually appropriated by companies and for what reasons.

Answer 1

Explanation:

Profit and loss appropriation accounts are necessary for businesses, especially partnerships, .

Answer 2

Answer:

A profit and loss (P&L) account shows the annual net profit or net loss of a business.

Explanation:

• A profit and loss (P&L) account shows the annual net profit or net loss of a business.
• It is prepared to determine the net profit or net loss of a trader. The P&L account is a component of final accounts.
• A profit and loss account is prepared to determine the net income (performance result) of an enterprise for the year/period.
• This is the most significant information to be reported for decision making.
• Net income or net profit is calculated by charging all operating expenses and by considering other incomes earned in the form of commission, interest, rent, discounts, and fees.