The main objective of preparing the profit and loss account 
is to know what is our netprofit or loss for a given period.

So based on this logic some of us will under an impression 
that why can call it as profit or loss account.

But my dear friend just have a look at the logic below.

In the profit and loss account we will record all the 
profit transactins and loss transactions.
Eg: profit on sale of a Fixed Assets.
Eg: Profit on Sale of investments in Stock market.

Eg: loss on sale of a capital Asset.
Eg: loss on sale of any security.

And: indirect transacitons which will altemately represents 
profit or losses.Like 

Sales     --------- Major income source.
All revenue items---- Represents the earning capacity of 
your organisation
All exp -----------  Which plays vital role in profit and 
loss.