Question

Write any two difference between profit and loss account and Profit & Loss appropriation account.

Answer 1

Answer:

plz mark it as a brainliest

Explanation:

Originally Answered: difference between profit and loss account and profit and loss appropriation account ?

Profit and loss account is a statement that shows the quantum of surplus funds available to thr entity at the end of a financial period.

Whereas profit and loss appropriation account gives you details about how the surplus that is shown in the profit and loss account is going to be spent.

Profit and loss account is a standalone statement and the profit and loss appropriation account is an extension of the former.

Profit and loss account is mandatory for all entities- partnerships, companies etc while the appropriation account is usually prepared only by partnership firms.

P&L appropriation account usually gives details about how the surplus money is going to be spent- I mean how much of it goes to each partner, how much is to be invested in capital expenditure, how much to be used as earmarked reserves etc.

Hope this clears your doubts.

Answer 2

The key difference between P&L and P&L appropriation account is that P&L account demonstrates the profit generated by the business whereas P&L Appropriation Account shows how profits will be distributed to relevant aspects such as dividend payments and reserves .

PLEASE MARK ME AS BRAINLEIST AND FOLLOW ME FOR ANY QUERIES .