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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 Posted / 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.
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