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WhatsApp: +86 18221755073145,000. In this example, all accounts are closed and transferred to the trading account. The credit entry of 1,45,000 is the gross profit for the period. 2. Profit and Loss …
WhatsApp: +86 18221755073Components of the Profit and Loss Account. A typical Profit and Loss Account includes the following components: Revenue: Total income from sales or services rendered. Cost of Goods Sold (COGS): Direct costs attributable to the production of goods sold.; Gross Profit: Calculated by subtracting COGS from Revenue. Operating Expenses: Costs necessary …
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WhatsApp: +86 182217550732. CONTENTS Definition Important Points pertaining to profit and loss account. Items shown on the Debit Side Items shown on the Credit Side Advantages Limitations Closing entries for Profit and Loss account Format of Profit and Loss Account Illustration New format of preparing Statement of Profit and loss under …
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WhatsApp: +86 18221755073If the candidate has some idea what a profit and loss account is, award an additional [1] mark. If the candidate produces a profit and loss account that is correct and conforms to the IB format (as above), award [2]. Maximum award: [2]. N.B. The candidate must follow the IB format.
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WhatsApp: +86 18221755073There are six basic steps that a business owner should observe when preparing a profit and loss statement. Below is an example of such a statement containing all the components …
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WhatsApp: +86 18221755073A profit and loss account is prepared to determine the net income(performance result) of an enterprise for the year/period. This is the most significant information to be reported for decision making. Net income or net profit is calculated by charging all operating expenses and by considering other incomes earned in the …
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WhatsApp: +86 18221755073The Profit and Loss Account is designed to show the net result of business activities: Net Profit = Revenue − Cost of Goods Sold − Operating Expenses. For instance, let's …
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