why is it called profit and loss account why not profit or
loss account, ( u either get profit or loss )
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Answer / arthi
There are two reasons: One is that you will not be aware initially how your operations would end, at the close of the year. It may either be profit or loss.
Another one would be it may be a profit in one year and loss in another year.
Further, the profit or loss is know only at the year end. But, in the course of the accounting year, when the account is drawn up say monthly, quarterly or half yearly, the results may either be profit or loss and the resultant profit or loss is only at the end of the year.
| Is This Answer Correct ? | 2 Yes | 10 No |
Answer / aditya bhushan
Because in profit and loss account we show both profit and loss on one statement for calculating net profit and net loss ,as we all know that net profit is different between debit and credit side of profit and loss account.
so that we use to say it profit and loss account not profit and loss account
| Is This Answer Correct ? | 2 Yes | 15 No |
Answer / dayakar
As it shows profits/gains at credit side as well as expenses
or losses at debit side
| Is This Answer Correct ? | 11 Yes | 28 No |
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