what is profit & Loss Appropriation A/c. why it is
prepered? what are its benefit for a company
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Answer / sudhansu dash
After preparation of Trial Balance we have to prepare our
income statement. Now a days this has been directlly
reflect in your concern statement whoever mantain the books
in electronic form.
We prepare the Profit and Loss account to get the net
profit or loss. So, like that we prepare Profit and Loss
Appropriation account to transfer our profit to various
reserve, devidend and retain earning account.
It will help the stakeholders to know the appropriate use
of the profit of the company by that we can establish the
position of the company.
|Is This Answer Correct ?||14 Yes||2 No|
Answer / hunny gupta
Profit and loss Appropriation A/C shows the appropriation
(distribution)of the profit calculated by preparing P&L A/c,
It' debit side shows items like the dividend proposed by the
company, provision for Corporate Dividend tax (on such
dividend), legal reserve and Interim Dividend.
While it's credit side shows the profit of P&L A/c, balance
of surplus of last year, provision no longer required.
The balancing figure, profit (Surplus)is
shown in the balance sheet under the head 'Reserves and
It should be noted that even though The Companies Act does
make it compulsory ti prepare this A/c, it is advisable to
do so because Profit & loss shows only expenses and charges
against profit, it does not shows it's appropriation.
|Is This Answer Correct ?||8 Yes||1 No|
Answer / abdullah amer
profit and loss account is the account prepared to find
out net profite or loss of the business during the
|Is This Answer Correct ?||4 Yes||11 No|
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