Profit and Loss account and Profitability: Difference between pages

From ACT Wiki
(Difference between pages)
Jump to navigationJump to search
imported>Doug Williamson
m (Categorise.)
 
imported>Doug Williamson
(Add second definition.)
 
Line 1: Line 1:
(P&L or PL or PNL).
1.


1.  
A relative measure of profit, designed to facilitate comparisons between different businesses and between different time periods.


Historically, a primary financial statement – showing the revenues earned in a period matched with the expenditures incurred in the same period to arrive at a figure of net profit or loss.
Often expressed in percentage terms, for example, Return on capital employed.


Under the 'double entry' accounting convention, income items in the Profit and loss account are Credits (CR) and expenses are Debits (DR).


A net profit is a Credit in the Profit and loss account.
2.


A net loss is a Debit in the Profit and loss account.
Profitability also means the general condition of earning profits, usually consistently, rather than being loss-making.


 
For example, a return to profitability following an earlier period of losses.
Under International Accounting Standards the profit and loss account is superseded by the Statement of profit or loss and other comprehensive income.
 
 
2.
 
Historically, another name for the Profit and Loss reserve in the balance sheet.
 
Net profits or losses <u>for the period</u> in the Profit and loss account feed through in turn to the Shareholders' funds (<u>cumulative</u> retained profits or losses) in the 'bottom half' - reserves section - of the Balance sheet (as <u>at the end of the period</u>).




== See also ==
== See also ==
* [[Accruals concept]]
* [[Drag]]
* [[Attributable profit]]
* [[Gross profit margin]]
* [[Balance sheet]]
* [[Cashflow statement]]
* [[Credit balance]]
* [[Debit balance]]
* [[Financial statements]]
* [[Income statement]]
* [[International Accounting Standards]]
* [[Loss]]
* [[Loss]]
* [[Net profit margin]]
* [[Operating profit margin]]
* [[Profit]]
* [[Profit]]
* [[Profit and Loss reserve]]
* [[Ratio analysis]]
* [[Statement of profit or loss and other comprehensive income]]
* [[Return on capital employed]]
 
* [[Underlying]]
[[Category:Accounting,_tax_and_regulation]]

Revision as of 10:58, 22 January 2019

1.

A relative measure of profit, designed to facilitate comparisons between different businesses and between different time periods.

Often expressed in percentage terms, for example, Return on capital employed.


2.

Profitability also means the general condition of earning profits, usually consistently, rather than being loss-making.

For example, a return to profitability following an earlier period of losses.


See also

Retrieved from ‘https://wiki.treasurers.org/w/index.php?title=Profit_and_Loss_account&oldid=38755’