Question

Why is Profit and loss Adjustment Account Prepare​ Explain​

Answer 1

The Profit and Loss Adjustment Account is prepared because of the following two reasons. In this situation, this account acts as a substitute for Profit and Loss Appropriation Account. The main rationale to prepare the Profit and Loss Adjustment Account is to ascertain true profit or loss.

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Answer 2

Answer:

The Profit and Loss Adjustment Account is prepared because of the following two reasons. ... In this situation, this account acts as a substitute for Profit and Loss Appropriation Account. The main rationale to prepare the Profit and Loss Adjustment Account is to ascertain true profit or loss.

Explanation:

Such errors may be disiclosed after the prepartion of final accounts, thus profit and loss adjustment account is prepared to rectify such errors in the subsequent accounting period without affecting the older profit and loss account.