Explain objectives of Profit & Loss Account. - Vidyadip

Question

Explain objectives of Profit & Loss Account.

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Answer

The objectives of Profit and Loss account are as follows:
$(1)$ Profit and Loss Account is prepared to know net profit or net loss of the business.
$(2)$ Through profit and loss account, administrative expenses, selling and distribution expenses, financial expenses and other expenses are losses can be known.
$(3)$ The capital will be increased by net profit and it will be decreased by net loss.

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