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Question
It is an account prepared to know the net profit/loss. It is also a nominal account and represents second stage.
Options
Trading Account
Profit and loss account
Balance sheet
Manufacturing account
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Solution
Profit and loss account
Explanation:
The profit and Loss account is prepared to calculate the business's net profit or net loss for a given accounting period.
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| Particulars | ₹ | Particulars | ₹ |
| Gross loss | 60,000 | Printing and stationery (office) | 2,000 |
| Promotional expenses | 5,000 | Legal charges | 5,000 |
| Distribution expenses | 15,000 | Bad debts | 1,000 |
| Commission paid | 7,000 | Depreciation | 2,000 |
| Interest on loan paid | 5,000 | Rent received | 4,000 |
| Packing charges (on sales) | 4,000 | Loss by fire not covered by insurance | 3,000 |
| Dividend received | 3,000 |
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Capital A/c……………..Dr.
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(Being Net Profit transferred to Capital A/c)
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