Question

______ is prepared to know the financial position where as ______ is prepared to ascertain the net profit or net loss.

Options

• Trading account, profit and loss account

• Profit and loss account, trading account

• Profit and loss account, balance sheet

• Balance sheet, profit and loss account

Answer 1

Balance sheet is prepared to know the financial position where as profit and loss account is prepared to ascertain the net profit or net loss.

Explanation:

The balance sheet shows assets and liabilities on a specific date, revealing financial position, while the profit & loss account records revenues and expenses over a period to determine net profit or net loss.