Income & expenditure a/c

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Querist : Anonymous

Querist : Anonymous (Querist)

17 August 2013 Hello experts. Can anyone please clarify the Circumstances when we need to prepare Income Expenditure A/c in place of P&L A/c. Can I&E be prepared for a profit making organisation as well?

Dintakurthi Tirumala

Dintakurthi Tirumala (Expert)
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18 August 2013 Income & Expenditure a/c shall be prepared for non-profit making organisation.

Profit and loss a/c means indication of net profit or loss for doing of some business or activity with the motto to earn profit so it is prepared for profit motto organisations.

Income & Expenditure a/c means indication of how much income earned and what is expenses and not involved profit or loss question for doing of business or activities just of social service motto. So for non-profit motto organisations there is no question of profit earning so need not to be consider profit or loss for doing activities so prepares Income and expenditure a/c.

OM SAI SRI SAI JAI JAI SAI

Querist : Anonymous

Querist : Anonymous (Querist)

18 August 2013 thanx for ur reply sir but if the entity is a service provider(like say a transportor), can it make I&E A/c?

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Dintakurthi Tirumala

Dintakurthi Tirumala (Expert)
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19 August 2013 In such case also you required to prepare Profit and Loss account because of for service tax purpose it recognised as service sector but for income tax purpose it also one of the business.
Even you prepare I&E it may not be the problem and mistake.

OM SAI SRI SAI JAI JAI SAI