Question

On the basis of the information given, identify the account.

1. It contains items of expenditure nature only.
2. It is prepared to ascertion the Net profit or the Net Loss.

Options

• Trading account

• Balance sheet

• Purchase account

• Profit and Loss account

Answer 1

Profit and Loss account

Explanation:

Profit & Loss Account contains indirect/expenditure items only and is prepared to ascertain the net profit or net loss for the period; Trading Account determines gross profit.