Chapter

Profit and Loss Account

Hrishikes Bhattacharya

in Banking Strategy, Credit Appraisal, and Lending Decisions

Second edition

Published in print October 2011 | ISBN: 9780198074106
Published online September 2012 | e-ISBN: 9780199080861 | DOI: http://dx.doi.org/10.1093/acprof:oso/9780198074106.003.0010
Profit and Loss Account

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The profit and loss account is a flow report which summarises the results of operations for a given period of time. The purpose of analysing the profit and loss account is to know the earning capacity of a business. This chapter presents accounting systems which can be used to calculate and interpret certain earning and expense ratios. It discusses the nature of costs and the methods of determining profit. It gives examples of trading, manufacturing, and profit and loss account of a manufacturing concern and uses extracts from the trail balance of company to draw up various final accounts.

Keywords: input-output; costs; profit; absorption costing; direct costing; profit measurement; profit and loss account; trading account; cost of goods sold; unusual incomes

Chapter.  9850 words. 

Subjects: Financial Markets

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