A Profit and Loss Account is used to illustrate the difference between the businesses Gross Profit (or it could be a loss) and the expenses that have been incurred.
From this we then come to what is called the Net Profit, which is the money made from sales and trading less all other expenses.
The Profit and Loss Account is calculated over a financial period, normally one year. Many firms financial year is April to April, but not always.
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