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In a profit and loss account, investments themselves are not directly recorded as expenses or revenues; instead, they impact financial statements through returns generated. For instance, dividends or interest income from investments are included in revenue, while any losses or impairments related to investments may be recognized as expenses. Additionally, the profit and loss account reflects operational performance, while the balance sheet shows the asset value of investments. Thus, the treatment of investments primarily affects income rather than the profit and loss account directly.

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How is carriage inward treated in a trading and profit and loss account?

it is added to the cost of sales


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"What are the limitations of profit and loss account?"


how does income and expenses account difference from Profit and Loss Account?

Income and expense for not for profit organisations is same as profit and loss account but they cannot use the name profit and loss account because not for profit organisations are not formed to earn profit.


What is the difference between profit and loss account and profit and loss appropiation account?

Profit and loss accont is used to calculate the profit or loss of business while profit and loss appropriation account is used to allocate or distribute net income or loss to share holders or different reserves account.


What is debit balance of profit and loss account?

Debit balance of Profit & Loss Account represents "Loss"


Advantages and disadvantages of trading profit and loss account?

: Profit and loss account gives the actual information about net profit or net loss of the business for an accounting period, Profit and loss account gives the actual information about indirect expenses, Profit and loss account serves to show the ratio between net profit to sales, Profit and loss account helps in showing the ratio between net profit to operating expenses, Profit and loss account helps in controlling indirect expenses


Profit and loss appropriation account uses meaning?

details of profit and loss appropriation account Profit and loss appropriation account is prepared after profit and loss account..It s a account where the profits earned by the company is brought in from profit and loss accont and it s distributed to various accounts like interim divident account, provision for taxiation account, general reserve account etc.....it s a account which shows how the profits are distributed in an organisation.....


Is profit and loss account is a nominal account?

Yes. Profit and loss account is a nominal account and also trading a/c to be prepared at the end of the year.


About projected balance sheet and profit and loss account?

how to prepare the forecast report of profit and loss account with balancesheet


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The profit and loss account is the account that can be used to calculate the net loss.


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The debts are treated as expenses in the profit and loss account, being entered on the debit side of the income statement coloums.