Question

What is profit and loss account

Answer 1

The purpose of the profit and loss account is to: Show whether a business has made a PROFIT or LOSS over a financial year. Describe how the profit or loss arose – e.g. categorising costs between "cost of sales" and operating costs.

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Answer 2

An account in the books of an organisation to which incomes and gains are credited and expenses and losses debited, so as to show the net profit or loss over a given period.