Dear Friends,
I have question that, Profit & Loss A/c shows either Profit or Loss, But why we call it 'Profit and Loss Account'?.
Waiting for ur valuable answer.
-p-a-r-e-s-h-
7 Replies
Abhijit Kanhegaonkar
(78 Points)
Replied 10 May 2007
Because on credit side you have profits (incomes) and on debit side you have losses (expenses)
Tejaswi
(13 Points)
Replied 10 May 2007
it is called Profit & loss account because, it is a statement which discloses both items which attriute to expenses and income, allthough the final result is either profit/loss, the statement as a whole indicate the items in details which contibutes the result. if i am wrong please correct me...
Dileep
(22 Points)
Replied 10 May 2007
we call it p&l a/c because we will be knowing whether the entity has earned profit or loss only after the preparation of this account.
this account shows not only profit but also loss, so this account is called as P&L a/c
thank you
this account shows not only profit but also loss, so this account is called as P&L a/c
thank you
Curious
(13 Points)
Replied 10 May 2007
it is called p&l cause before prepairing it u do not know whether u r going to get profit or loss
L V Ramakrishna
(13 Points)
Replied 10 May 2007
Though the out come of P&L a/c is either profit or loss, it consists, items of both incomes & expenses aswell as profits & losses. Hence it is profit & loss a/c
Rajeshittyeapen
(34 Points)
Replied 10 May 2007
dear Paresh
normally a company or business will have many activities associated with the business. u may make profit or loss in each of the transactions and deal. these amount to profits and losses and will be recorded in teh p&l a/c accordingly. for eg: profit on sale on asset, loss on sale of asset etc. and it also includes al income & expenses... so at the end, this group of profits and losses make this account also a profit and loss a/c.
ragards
rajesh itty eapen
normally a company or business will have many activities associated with the business. u may make profit or loss in each of the transactions and deal. these amount to profits and losses and will be recorded in teh p&l a/c accordingly. for eg: profit on sale on asset, loss on sale of asset etc. and it also includes al income & expenses... so at the end, this group of profits and losses make this account also a profit and loss a/c.
ragards
rajesh itty eapen
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