What is profit and loss account

Question

Accepted Answer

A profit and loss account is a financial statement that shows the revenues, expenses, and net profit or loss of a company over a specific period.

It summarizes the company's financial performance during a given period.
It includes revenues from sales, cost of goods sold, operating expenses, and other income or expenses.
The difference between total revenues and total expenses represents the net profit or loss.
It helps in assessing the profitability and financial health of a business.
Example: A profit and loss account for a company may show revenues of $1,000,000, cost of goods sold of $600,000, operating expenses of $300,000, and other income of $50,000, resulting in a net profit of $150,000.

Accepted Answer

an account in the books of an organization 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.

What is profit and loss account

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