Profit and Loss Account

An account which is prepared to determine the net profit or net loss for accounting period is called profit and loss account.

The profit and loss account calculates the profit the business has attained when leaving all the expenses incurred in running the business.


A trading, profit and loss account may be a money record that shows the business's money performance over a given fundamental measure. The commerce account calculates the lucre by putting off direct prices of production from sales. Profit and loss account calculates net profit.