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Question
Net profit/loss is transferred from ______.
Options
Trading Account
Profit and loss account
Balance sheet
Manufacturing account
Solution
Net profit/loss is transferred from Profit and loss account.
Explanation:
- The profit and Loss account is prepared to calculate the business's net profit or net loss for a given accounting period.
- The difference of the two sides of this account is either net profit or net loss.
- Net profit or net loss is transferred to the capital account.
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RELATED QUESTIONS
Answer in One Sentence:
What do you mean by Profit & Loss A/c?
State True or False with reasons :
Income due but not received is a liability.
Fill in the blank :
An excess of debit over credit in the Profit & Loss A/c represents the __________.
Find the odd one :
Find the odd one :
Give a word, term or phrase which can substitute the following statement:
Account prepared to know Net Profit or Net Loss.
Give a word, term or phrase which can substitute the following statement:
Account prepared to know Net Profit or Net Loss.
Prepare Profit and Loss Account of Sanjay Brothers for the year ended 31st March, 2018 from the following balances.
| 1) | Bank charges | ₹ 22,000 |
| 2) | Interest (Cr.) | ₹ 16,000 |
| 3) | Sundry expenses | ₹ 42,000 |
| 4) | Insurance | ₹ 35,000 |
| 5) | Salaries | ₹ 40,000 |
| 6) | Rates and Taxes | ₹ 13,000 |
| 7) | Postage | ₹ 8,000 |
| 8) | Advertisement | ₹ 40,000 |
| 9) | Rent paid | ₹ 32,000 |
| 10) | Bad debts | ₹ 10,000 |
| 11) | Commission (Cr.) | ₹ 17,500 |
| 12) | Printing & Stationery | ₹ 21,000 |
| 13) | Loss by fire | ₹ 18,000 |
| 14) | Discount (Dr.) | ₹ 23,000 |
| 15) | Discount (Cr.) | ₹ 37,000 |
| 16) | Misc. Income | ₹ 14,000 |
| 17) | Depreciation | ₹ 34,000 |
| 18) | Carriage Outwards | ₹ 60,000 |
| 19) | Godown Expenses | ₹ 40,000 |
Note: Gross Profit ₹ 4,07,500
Carriage outwards are recorded the ______ side of the ______.
Distinguish between a Trading Account and a Profit and Loss Account.
