Tell me about profit and loss.

Question

Accepted Answer

Profit and loss is a financial statement that shows the revenues, expenses, and net income or loss of a business.

Profit and loss statement is also known as income statement or statement of earnings.
It summarizes the financial performance of a company over a specific period of time.
Revenues are the income generated from the sale of goods or services.
Expenses are the costs incurred in the process of generating revenue.
Net income is the difference between revenues and expenses, indicating the profitability of the business.
A positive net income represents a profit, while a negative net income represents a loss.
Profit and loss statement helps in assessing the financial health and performance of a business.
It is used by investors, creditors, and management to make informed decisions.
Example: A company's profit and loss statement for the year shows revenues of $1 million, expenses of $800,000, and a net income of $200,000.

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