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When and why profit and loss account is dr?
Normally you'd expect it to be CR as it's an accumulation of profit over the years. However, dividends (drawings if not a company) will reduce the profit and loss account. Combine that with a few years worth of losses and it can easily become a DR balance.
Why is depreciation is charged on profit and loss account?
Depreciation is the allocation of the portion of assets value to fiscal year in which it is used it is charged to profit and loss account because it is that portion of asset value which is expensed and expenses are shown in profit and loss account.
Is discount received an income?
Yes it is an income. It will be posted in the credit side of the profit and loss account.
What is a trading accounts?
A Trading Account is an account that shows the gross profit of or loss of a manufactures or retail buisness. Sales less than the cost of sales. This is an account similar to a traditional account.
What does a negative profit mean?
Negative profit is profit realized from effective loss prevention. For example, A company introduces a new procedure that reduces loss by 5%. This 5% is actually profit that would not have been realized if it had not been for the procedure being implemented yet it still contributes to the companies overall profit.
What would you find on a profit and loss account?
In profit and loss account normally list all in the revenues and expenses and profit or loss for any particular fiscal year of company.
What is the meaning of close the Profit and Loss Summary account?
profit is when the company is making money and a loss is the company is not making money.
Purpose of profit and lost account?
The purpose of the profit and loss account is to give you an idea about whether a company has made a profit or loss more than a financial year. An income and loss account begins with the trading account and then takes into account all the other outcome associated with the company.
Performance of a company is disclosed in profit and loss Account Yes-No?
yes income statement or profit and loss account is primary object of disclosing the performance of a company or enterprise
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.....
Why do companies produce profit and loss account?
Profit and Loss A/c:Profit and loss account as name describes prepares to determine the net profit earned by company in one accounting year and which is not available information in any other financial statement of company.
Why profit and loss account is called as profit and loss account and why not profit or loss account?
Tradition, and the need to call it something.
What are the limitations of profit and loss account?
"What are the limitations of profit and loss account?"
Difference between profit and loss account and profit and loss appropriation account?
Profit and loss appropriation account shows the distribution of net profit amongst the shareholders in the form of dividend and transfer of profit to various reserves and issue of bonus share. profit and loss appropriation account is prepared after the preparation of profit and loss account. Profit and loss account provides the information about adjustment relating to last year. Profit and loss appropriation account also provides the information about the appropriation of dividend out of available profit. Profit and loss appropriation account is prepared after profit and loss account and before the preparation of balance sheet. Profit and loss appropriation account is a vital item of final account
Are profit and loss account on an income statement or balance sheet?
Profit & Loss Account is the Statement showing indirect expenses and receivable of a Company where as Balance Sheet is the Statement highlighting Assets and Liabilities of the said Company.
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.
