Jonny Young, Author at Business advice from is4profit's Posts

What Is a Profit and Loss Account?

What Is a Profit and Loss Account?

A profit and loss account details your business transactions, subtracting the total outgoings from the total income to tell you how much, if any, profit you have made. Your profit and loss sheet, unlike a balance sheet, displays the financial health of your company for a period of time – a month, a quarter or a year. A balance sheet only represents your finances at a particular moment in time. If your company is incorporated, you are required by law to produce a profit and loss sheet for each financial year. If your business is not trading as a limited company you don’t have to produce one, but producing a profit and loss statement is nevertheless useful to determine how your business is performing at a glance. What goes into your P&L account? 1. Gross income (the total of all money th... »