PROFIT AND LOSS

ACCOUNT
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Intramantra Global Solution PVT LTD, Indore

http://intramantra.com
 INTRODUCTION ABOUT ACCOUNTS
It is registering or noting the facts of transaction in an
easily understandable way.
To know the profit and loss of a business two types of
account are made :-
1. TRADING ACCOUNT.
2. PROFIT AND LOSS ACCOUNT.
Together they are called as INCOME STATEMENT.
To know about the assets and liabilities of a business
BALANCE SHEET (Position Statement ) is prepared.
Income and position statement together make FINAL A/C.
 TRADING ACCOUNT

1. It gives the Gross profit and Gross Loss.

2. It gives the Direct expenses.
(a) excise duty.
(b) railway charges.
(c) M/F wages.
(d) Packaging expenses.

3. It helps in Competitive study of the expenses.

Trading a/c also gives us the details about the followings : -

1. Net Sales :- It is the cost of the amount of the goods sold in

the market.

2. Net purchase : - Capital required for the purchase of

goods,excluding returns,donated,distributed.

3. Opening stock :- Unsold goods of the previous year.

4. Closing stock :- Unsold goods of the present year.
 TRADING ACCOUNT

DEBIT CREDIT

1. Opening stock. 1. Net Sales.

2. New purchase. 2.Closing stock.

3. Direct Expenses.
 GROSS PROFIT AND GROSS LOSS

• When the total on the Debit Side is greater than

that of Credit Side,the difference is called as
GROSS LOSS.This gross loss is transferred to
the debit side of the P/L A/C.

• When the total on the credit side is more than

that of the debit side then it is GROSS PROFIT
and it is transferred to the credit side of the P/L
A/C.
Thank You !!!