Article: Profit And Loss Account Basics
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Profit And Loss Account Basics
The profit and loss account is used to show the results of an enterprise over a given period. The statement forms a central part of monitoring your business and you need to have a good grasp of the basic principles used in its construction.
What is a profit and loss account?
The profit and loss account (p&l) is usually presented as a statement and it shows the trading activity and associated expenditure of an organisation over a defined period of time.
A typical p&l will contain the following:
Sales
This is the turnover of the business, the main source of income from sales of products or services. This figure is always net of taxes as these are payable to the government and do not form part of the income of the busi...
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