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expenditure is the amount of money spent on a weekly or monthly basis.

income is the financial gain (earned or unearned) over a given period of time.

a profit and loss account is an account compiled at the end of an accounting period to show gross and net profit or loss

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βˆ™ 15y ago
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βˆ™ 15y ago

A profit and loss account itemises the income and expenditure of a business in a given period, say a year. This gives an indication of how well the business is trading. The Balance Sheet itemises the company's assets and debts at a particular moment in time, say the end of a trading year. This gives an indication of whether the company is solvent. If the company's debts outweigh the assets then it may need to consider winding up unless the people to whom the debts are payable indicate their willingness to wait for payment.

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βˆ™ 12y ago

Profit and loss appropriation account shows the distribution of net profit amongst the shareholders in the form of dividend and transfer of profit to various reserves and issue of bonus share. profit and loss appropriation account is prepared after the preparation of profit and loss account. Profit and loss account provides the information about adjustment relating to last year. Profit and loss appropriation account also provides the information about the appropriation of dividend out of available profit. Profit and loss appropriation account is prepared after profit and loss account and before the preparation of balance sheet. Profit and loss appropriation account is a vital item of final account

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βˆ™ 10y ago

Trading account only records the revenue and corresponding direct expenses related to that revenues while profit and loss accounts records the indirect expenses to run day to day tasks of business.

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βˆ™ 12y ago

profit is the balance when you pay all of the expenses the remainder that is left is the profit. and loss is when the expenses are greater than revenue means that the revenue is less and the expenses are more so when you subtract revenue from the expenses the result will be minus that is called loss E.g; 400 revenue - 800 expenses= -400 this is called net loss. income is the amount of revenue you received and expenditure is all the expenses you are going to pay whether it is purchasing or to such as buying equipment or paying utilities like water and electricity

wrote by Abdinasir Ahmed Jimale

Student of undergraduate İnternational Trade And management at İstanbul Şehir University. short005@hotmail.com

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βˆ™ 10y ago

Profit and loss account shows current fiscal year's income and expenses while balance sheet shows the performance of business from starting day of business to till date.

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Q: What is the difference between trading account and profit and loss account?
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Related questions

Difference between Profit and loss account and Profit or loss account?

No difference. It is just a matter of symantics (different ways to say the same thing).


Advantages and disadvantages of trading profit and loss account?

: Profit and loss account gives the actual information about net profit or net loss of the business for an accounting period, Profit and loss account gives the actual information about indirect expenses, Profit and loss account serves to show the ratio between net profit to sales, Profit and loss account helps in showing the ratio between net profit to operating expenses, Profit and loss account helps in controlling indirect expenses


Is profit and loss account is a nominal account?

Yes. Profit and loss account is a nominal account and also trading a/c to be prepared at the end of the year.


What is the difference between profit and loss account and profit and loss appropiation account?

Profit and loss accont is used to calculate the profit or loss of business while profit and loss appropriation account is used to allocate or distribute net income or loss to share holders or different reserves account.


What does the day trading term arbitrage trading mean?

Arbitrage trading is trading that takes advantage of a difference in price between two or more different markets, to make a profit equal to the difference in the market prices. Arbitrage trading is useful in banks and brokerage firms.


Preparing departmental trading and profit and loss account?

When preparing departmental trading and a profit and loss account, expenses must be taken into account first. These include departmental expenses, and common expenses, including administrative expenses.


What is difference between P and L statement and income and expenditure statement?

Income and expenditure account is used by not for profit companies as they are formed for not for profit basis that's why they cannot use profit and loss account.


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What is the difference between account receivable and accounts payable confirmation?

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What is difference between non profit and not for profit?

There is no difference.


Difference between not for profit and non profit?

No difference.


how does income and expenses account difference from Profit and Loss Account?

Income and expense for not for profit organisations is same as profit and loss account but they cannot use the name profit and loss account because not for profit organisations are not formed to earn profit.