how to prepare Profit and los accounts ?
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Answer Posted / shaik jaffar ali
After preparing Trading A/c then we will prepare P&L A/c as
well as P & L Appropriation A/c. After preparing Trading
A/c the Gross profit or Gross loss should be shown in
Tranding A/c. If Gross Profit is there the profit should be
carried farward of the P&L A/c on credit side. or If the
Gross Loss should be shown carried farword that Gross Loss
on the Debit side of P & L A/c. and next all indirect
expenses must be add on the debit side of P&L A/c ex:-
(salaries,rent, wages,VAT tax,Bad Debts,Electricity Bill,
Telephone Bill, Mobile or cell phone bill,printing &
stationery, postage & telegrams,Discount
allowed,Depriciations etc). and any Discount received,
Commission Received should take on the credit side of the P
& L A/c. and then calculate all Debits & Credits
total.After calculating the Credit Balance is more than the
Debit Balance the remaining balance is Net Profit.as the
same way the Debit Balance is more than the Credit Balance
that amount is Net Loss. This is complete Profit & Loss A/c
| Is This Answer Correct ? | 138 Yes | 16 No |
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