Describe the key components of a Profit and Los... - JSS3 Business studies Trading, profit and loss account Question

The key components of a Profit and Loss Account include operating revenue, cost of goods sold (COGS), gross profit, operating expenses, non-operating income, non-operating expenses, and net profit or loss. Operating revenue represents income generated from primary business activities, while COGS reflects the direct costs associated with producing goods or services. Gross profit is calculated by subtracting COGS from operating revenue. Operating expenses comprise costs incurred from running the business, while non-operating items are revenue or expenses not directly related to core operations. Net profit or loss is determined by deducting total expenses from gross profit. For example, operating revenue would include sales revenue, while operating expenses could consist of salaries, rent, and utilities.