Profit And Loss Account

Income And Expenditure Account

Prepare by business undertakings

Prepared by non-trading organizations

Credit balance of this account is known as “Net profit” and added to opening capital

Credit balance is known as “excess of income over expenditure or surplus” and added to opening capital fund

Debit balance of this account is known as “ Net loss” and deducted from opening capital

Debit balance is known as “excess of expenditure over income or deficit” and deducted from opening capital fund

To check correctness of accounts, trial balance is prepared before preparing this Profit & Loss Account

To check correctness of accounts, receipts and payment account is prepared before preparing this account.