Meaning:

Profit and loss account bears the amount of net profit or net loss of a company after the end of a certain calculating time period. This account is prepared after calculating the amount of gross profit and loss of a company which is the part of the trading account. Profit and loss account deducts all types of indirect expenses done in favor of production from the gross profit or loss and then measures the net profit or loss.

Links of Previous Main Topic:-

• Balance sheet in final accounts without adjustments
• Difference between profit and loss accounts and balance sheet
• Features or characteristics balance sheet
• Limitations of final accounts or financial statements
• Meaning of financial statements or final accounts
• Need or importance and purpose of trading account
• Need or purpose and importance of profit and loss account
• Performa of balance sheet
• Performa profit loss account
• Performa of trading account
• Points to be considered before creating balance sheet

Links of Next Accounting Topics:-

• Trading account final accounts without adjustments
• Adjustments additional information in preparation of final accounts
• Meaning of bank reconciliation statements
• Bills of exchange concept of bills of exchange
• Errors affecting or disclosed by trial balance introducing the concept
• Meaning of depreciation

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