Correct title in the Profit and Loss Statement

Aug 6th, 2022
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Structure of the Profit and Loss Statement The main categories that can be found on the PL include: Revenue (or Sales) Cost of Goods Sold (or Cost of Sales) Selling, General Administrative (SGA) Expenses.
A profit and loss account will include your credits (which includes turnover and other income) and deduct your debits (which includes allowances, cost of sales and overheads).
Examples of account title in accounting are as below: Rent Expense- Operating expense. Salaries and Wages- Operating expense. Sales- Revenue.
A profit and loss statement includes a businesss total revenue, expenses, gains, and losses, arriving at net income for a specific accounting period. Management analyzes a PL to determine how to increase profitability by increasing revenue, lowering costs or both.
The profit and loss (PL) statement is a financial statement that summarizes the revenues, costs, and expenses incurred during a specified period. The PL statement is one of three financial statements that every public company issues quarterly and annually, along with the balance sheet and the cash flow statement.
The PL will include three key componentsrevenue, expenses, and income. There are three key steps to making a profit and loss statement.
The top section of the profit and loss account, up to and including the gross profit, is referred to as the trading account. This is because it shows only the direct trading activities of the business. Within this, sits the sales figure and costs of sales.
Profit Loss Account summarizes business income and expenses during a period, essential for assessing profitability and decision-making. Important components include revenue, COGS, operating expenses, operating profit, net income.

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