The Profit and Loss Account shows the net result of all business operations for a given period. It records all indirect incomes and expenses that are not directly related to trading. The account helps determine the Net Profit or Net Loss earned by the business. The final result is added to or deducted from the capital in the Balance Sheet.
- Shows the Net Profit or Loss after all indirect expenses.
- Useful to control and monitor operational efficiency.
- Supports income tax assessment and business performance review.
- Guides decisions on cost-cutting and revenue improvement.