P&l a/c

Because it shows profit and loss from every kind of transactions. For example, there is net profit as per p/l a/c and there is also one item "loss on sale of fixed asset". It means the loss has been set off against other incomes, hence showing net profit. As it is showing both incomes/ profit and loss on sale of fixed asset. That's why it has capability to show profit and loss of each kind of transactions, hence it is called profit and loss a/c. Hope you understand! :)