Identification of Profit And Loss Account Items - SS1 Accounting Lesson Note

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A profit and loss account, also known as an income statement, is a financial statement that shows a company's revenue and expenses over a specific period of time. The items in a profit and loss account generally include the following:

Revenue: This includes all the money a company earned during the period, such as sales revenue, fees for services, or interest earned on investments.
Cost of goods sold: This is the cost of producing or acquiring the products or services sold by the company. For example, for a manufacturing company, this would include the cost of raw materials and labor to produce the products.
Gross profit: This is the difference between the revenue and the cost of goods sold. It represents the amount of money a company has left over after deducting the direct costs of producing its products or services.
Operating expenses: These are the costs incurred by a company to operate its business, such as rent, salaries and wages, advertising, utilities, and insurance.
Operating profit: This is the difference between the gross profit and the operating expenses. It represents the profit a company made from its core operations.
Other income and expenses: These are the non-operating items that affect a company's profit or loss, such as interest income, investment gains or losses, or foreign exchange gains or losses.
Net profit or loss: This is the final figure in the profit and loss account, representing the total profit or loss made by the company during the period. If the revenue is greater than the expenses, the company made a profit, and if the expenses are greater than the revenue, the company made a loss.