Append below are the main differences/distinction between:
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Profit And Loss Account |
Income And Expenditure Account |
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Prepare by business undertakings |
Prepared by non-trading organizations |
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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 |
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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 |
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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. |