Profit And Loss Account: Meaning/Definition - SS1 Accounting Past Questions and Answers - page 1
What is the purpose of a profit and loss account?
To show a company's assets and liabilities
To show a company's revenue and expenses
To show a company's cash flow
What does a company deduct from its revenue in a profit and loss account?
Its assets
Its expenses
Its liabilities
If a company's expenses are greater than its revenue in a profit and loss account, what does it mean?
The company made a profit
The company made a loss
The company broke even
What is the difference between revenue and profit in a profit and loss account?
Revenue is the total amount of money a company made during a period, and profit is the money left over after deducting expenses.
Revenue is the total amount of money a company made during a period, and profit is the total amount of money a company has.
Revenue and profit are the same thing.
What is the use of a profit and loss account?
To analyze a company's financial performance
To record a company's cash transactions
To show a company's balance sheet
How is a company's net profit or loss calculated in a profit and loss account?
By deducting the company's total expenses from its total revenue.