Need and Importance of Profit and Loss Account Homework Help

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What is the purpose of Profit and loss Account?
It is very clear that Profit and Loss is calculated for a specific period of time. The main factors associated with this are revenue and expenses. It means what the company’s inflows during the exact time period or what that company’s expenses by using that revenues in a perfect time period is required to be calculated.

Now, what is the need of this calculation? The requirement is to inform or to show the investors that how much gain or loss is there at the specific time period.

What are the various sections of people where purpose of Profit and Loss account is very much important?

1. Managers.
2. Creditors or lenders.
3. Shareholders.
4. Potential contractors.
5. Investors.

The importance for the different group is different and they always look this for some particular purpose. Solutions for assignments need proper care and thus if you have ant problem, then our Need and Importance of Profit and Loss Account Assignment Help is always with you.

What are the important components of expenses that influence the complete profit or loss account?
1. Cost of the product sold.
2. Expenses related to selling.
3. Expenses related to G&A or General and Administrative.
4. Depreciation and Amortization.
5. R&D Expenses or Research and Development.

What is the importance of expenses in P&L statement?
The managers take decision after going through the various kinds of expenses and the net income. The main motto of this statement is to compare a company’s profit. If profit is increasing than the last period of time, then company is developing, but if profit is very less or negligible or expenses is more , then budget needs to created by the managers to take a proper decision. Avail Need and Importance of Profit and Loss Account Homework Help support to know it in a broader way.

Importance related to per share earning
1. Earning per share gets calculates after acquiring the net income with the help of formula.

2. Earning per share= (net income – Preferred stock dividends)/ weighted of common stock shares outstanding.

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