Answer Posted / saravanank
P & L reflects only expenses to make sales to customers, e.g administration expense like office stationery (bill books and invoices),transportation to sell (moving goods to customer place), office staff salaries to maintain books (i.e. Employees not labours, now understand??!)and marketting, etc only shown. It will show net profit if administrative cost are less than gross profit.
But trading reflects only expenses relating to making product, i.e direct cost, for making a product we have to spend for materials, labour cost, carriage inwards, transportation charges for materials inwards, etc... This will show gross profit only sales are more than cost of sales.
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