Ask the Accountant!

Q. What is the profit and loss account?

A. The profit and loss account; also known as the P&L or the income statement.

Essentially, it’s an account in the books of an organisation, where incomes and gains are credited, and expenses and losses debited; so as to show the net profit or loss over a given period, normally a quarter or a year.

In short, it’s a financial statement showing a company’s net profit or loss in a given period.

Of course, we always need to caveat that it isn’t as simple as explained above. It’s why we do, what we do!

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