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With profit and loss account into consideration, it is vital for students to understand what is P& L Accounts?
What are P&L accounts?
P&L accounts are the financial statements for a particular period of time stating the net income of the entity. With expenses and revenue statement generated in that particularperiod of time, the net income is calculated which comes under the P & L accounts of an entity.
Stating the net income through Profit and Loss accounts helps in analyzing the proper financial positioning of the firm for a particular time and not till the financial year end.
Along with cash flow and balance sheets, which are the major segments of financial statement of any firm, Profit and Loss accounts are taken into consideration for a particular segment of time to be examined.
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