profit and loss account


profit and loss account
= P & L account
1) An account in the books of an organization showing the profits (or losses) made on its business activities with the deduction of the appropriate expenses.
2) A statement of the profit (or loss) of an organization over a financial period. It is one of the statutory accounts that, for most limited companies, has to be filed annually with the UK Registrar of Companies (see annual accounts). The profit and loss account explains what has happened since the previous balance sheet; the users of financial statements require information on the progress and future prospects of the company. The P & L account typically consists of three parts. The first is a trading account, showing the total sales income less the costs of production, etc. , and any changes in the value of stock or work in progress from the last accounting period. This gives the gross profit (or loss). The second part gives any other income and lists administrative and other costs to arrive at a net profit (or loss). From this net profit before taxation the appropriate corporation tax is deducted to give the net profit after taxation. In the third part, the net profit after tax is appropriated to dividends or to reserves (retained profit). The UK Companies Act (1985) gives a choice of four formats, one of which must be used to file a profit and loss account for a registered company.

Big dictionary of business and management. 2014.

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  • profit and loss account — ► NOUN ▪ an account to which incomes and gains are credited and expenses and losses debited, so as to show the net profit or loss …   English terms dictionary

  • profit and loss account — P & L account 1) An account in the books of an organization showing the profits (or losses) made on its business activities with the deduction of the appropriate expenses. 2) A statement of the profit (or loss) of an organization over a financial …   Accounting dictionary

  • profit and loss account — noun an account compiled at the end of an accounting period to show gross and net profit or loss • Syn: ↑profit and loss • Hypernyms: ↑account, ↑accounting, ↑account statement * * * ˌprofit and ˈloss account [profit and loss account] …   Useful english dictionary

  • profit and loss account — 1. A statement showing a company s income and expenditure over a period of time, usually one year. Part of the financial statements of the company. Dresdner Kleinwort Wasserstein financial glossary 2. A reserve in a company s balance sheet,… …   Financial and business terms

  • profit and loss account — UK / US noun [countable] Word forms profit and loss account : singular profit and loss account plural profit and loss accounts business a document that shows how much money was received and spent by a company during a particular period of time,… …   English dictionary

  • profit and loss account — noun Profit and loss account is used before these nouns: ↑account …   Collocations dictionary

  • profit and loss account — profit and loss ac,count noun count a document that shows how much money was received and spent by a company during a particular period of time, and whether or not it made a profit …   Usage of the words and phrases in modern English

  • profit and loss account — profit and loss ac.count n BrE a financial statement showing a company s income, spending, and profit over a particular period …   Dictionary of contemporary English


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