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 / megha arora
Profit & Loss A/C shows the net profit of the
Organisation.An oraganistion earns profit for
oprating,financing&investing activities etc.May be it be
the case that there may be loss from one activity and
profit from others and vice-versa.So P&L consists of both
loss as welll as Profit.That's why known as P&L not Por L
| Is This Answer Correct ? | 159 Yes | 28 No |
Answer / sankari varadarajan
The profit and loss account shows the particulars through which the profit or income has been earned by an organization like any income received for the work that has been done. And at the same time, it also shows the particulars (like depreciation, bad debts) through which the firm's profit may get reduced or may incur loss. As it shows both the profit generating item and loss generating item at the same time and in the same account, it is known as profit AND loss account.
| Is This Answer Correct ? | 12 Yes | 6 No |
Answer / ronald antony t
Because P&L a/c records profits earned by business and loss incurred to business
And Net Profit/loss is just balancing fig of abow insted of transfering all profits and loss we are just transfering Net Balance
| Is This Answer Correct ? | 11 Yes | 7 No |
Answer / jovita
because we enter profits and losses in the p&l a/c
e.g: profit on sale of investment
loss on sale of machinery etc
| Is This Answer Correct ? | 5 Yes | 3 No |
Answer / c a indudhara
It is called as "Profit and loss"not "profit or loss" why because.
Profit and loss account contains both profit from some operations and loss from some operation ex: profit on sale of asset and loss on sale of investments
As this statement contains both the thing, so it is called as Profit and Loss account
| Is This Answer Correct ? | 0 Yes | 0 No |
Answer / ranjitha ravishetty
It can show only one item either profit or loss not both
| Is This Answer Correct ? | 0 Yes | 1 No |
Answer / cr group
From Busineess Active ,you got profit from one activity ,loss from another activity so over all u got profit or loss
| Is This Answer Correct ? | 1 Yes | 2 No |
Answer / sujit
Because, we may get profit in the Trading account but due to the operation activity we might have loss in the manufacturing account, so we call it profit and loss account instead of profit or loss account.
| Is This Answer Correct ? | 3 Yes | 5 No |
Answer / prasant m
how much profit excess over expenses and losses or how much
expenses excess over profit,exactly can say,all the gains
and losses are collected in order to ascertain the excess of
gains over the losses or vice-versa. second Q is why not
Profit or Loss ,every word not denominate just from air dear
friend,there was some concept behind that that is the
difference between "And" and "OR",Every business has both
side effect if we will go each activities step by step, we
would find some transaction we have lost or spent more then
cost of goods and some cases gone according to business
motive so we can not say we got profit each transaction.
have a good day
| Is This Answer Correct ? | 10 Yes | 13 No |
Answer / siva
the profit and loss account is not prepared every month of the year, and is prepared either quarterly or half yearly or else yearly. It is not necessary to incur profit during every period or else incur loss. And, as it comprises of bad debts , depreciation,etc., as its part,which are treated as loss sometimes in accounting, it is called as profit and loss account. The profit evolved in Profit and Loss account also carries losses of some periods. And i think, that is why we call it as Profit and Loss account and not as profit or loss account. This is what the reason, upto my knowledge.
If this is not correct, please place a reply.
| Is This Answer Correct ? | 4 Yes | 7 No |
what is an intengible Assets ? 1. cash 2. building 3. goodwill 4. stock.
2. You are required to prepare a Profit & Loss Account for the year ending 31st December, 2007 and the Balance Sheet on that date. The Trial Balance of XYZ Ltd. for the year ended 31st December 2007 is as follows:- Trial Balance of XYZ Ltd. as on 31st Dec. 2007 Debit Balances Rs. Credit Balances Rs. Materials used 3,50,000 Sales(including 2% Sales tax) 9,18,000 Cost of Labour 1,50,000 Sale of Scrap 100 Stock, finished and work in process on 31st December, 2006 50,000 Rent received 2,000 Wages : Factory Staff 15,000 Discounts 2,750 Directors Remuneration 50,000 Recovered against fire claim re : Stock 5,000 Salaries : Clerical Staff 75,000 Capital : Equity 25,000 Insurances : Workmen’s Compensation 1,500 Preference- 9% 8,000 General, fire etc. 2,000 Creditors 1,56,000 Directors’ Life Insurance 1,500 Provision for Taxation 1,05,000 Maintenance : Buildings 1,000 Profit & Loss Account 13,750 Plant and Machinery 12,500 Rent and Rates of premises and hire of plant 20,000 Heat, Light and Power 15,000 Experimental and Laboratory Expenses 10,000 Canteen Expenses 5,000 Staff Welfare expenses 2,500 Motor Expenses 12,500 Professional Charges 2,800 Postage and Telephone 3,500 Books, Printing and Stationery 11,000 Sundry expenses 10,000 Carriage and Packing on Sales 3,300 Discounts 5,000 Debtors 1,78,000 Freehold Property 50,000 Plant and Machinery 12,500 Fixtures and Fittings – Offices 3,500 Office machinery and Equipment 3,000 Motor Car and Van 6,500 Stock of materials on 31st Dec. 2007 1,20,000 Bank 38,000 Sales Tax Paid 15,000 12,35,600 12,35,600 Depreciation is to be provided at the following rates: Plant and Machinery 10% Fixture and Fittings 05% Office Machinery, etc. 10% Motor Vans and Cars 25% The stock of finished goods and work in progress as on 31st December, 2007 was Rs. 35,000. Provide for preference dividend and ordinary dividend at 10%. The total taxation liability is estimated at Rs.1,50,000 of which Rs. 75,000 relates to the current year. Debtors include Rs. 10,000 deposited as security against government contracts. The Works Manager is paid partly by salary and partly by a commission; he is entitled to a commission of 5% on the amount by which the surplus in the factory cost exceeds 20% of the sales for the period. Charge the commission if any in the Profit and Loss Account.
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