What are the components of Profit and Loss Account? Explain them

What are the components of Profit and Loss Account? Explain them


All expenses, losses, incomes and gains are the components of Profit and Loss Account:

Expenses and losses are shown on the debit side of Profit & Loss Account. Following is the list:

Administrative Expenses:

* Office Salaries
* Postage & Telephone
* Traveling & Conveyance
* Legal Charges
* Office Rent
* Depreciation
* Audit Fees
* Insurance
* Repairs & Renewals

Selling and Distribution Expenses:

* Advertisement
* Carriage Outward
* Free Samples
* Bad Debts
* Sales Commission

Incomes and Gains are shown on the credit side of the Profit & Loss Account. Following is the list:

Gross Profit (balance forwarded from the Trading account)

Other Income:

* Discount received
* Commission received
* Non-Trading Income
* Interest received
* Bad Debts recovered
* Rent received
* Profit on the sale of assets
What do you mean by accounting concepts?
Accounting concepts are those basis assumptions upon which basic process of accounting is based. Following are the basic accounting concepts...
Accounting Conventions - a)Convention of Conservation b)Convention of Materiality c) Convention of Consistency
Convention of Conservation - This accounting convention is generally expressed as to “anticipate all the future losses and expenses, without considering the future incomes
What are the various systems of Accounting? Explain them.
There are two systems of Accounting: 1) Cash System of Accounting 2) Mercantile or Accrual System of Accounting
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