Profit & Loss account and Balance Sheet
Profit & Loss account and Balance Sheet
The Profit and Loss account is the statement of income and expenses which shows the net profit and loss for the particular period while the balance sheet is the statement of assets, liabilities and capital which showing the actual financial position of an entity. To know more about the Difference between the Profit and Loss account and Balance Sheet we have to clear the meaning of both the terms. So, first, we will discuss the meaning of Profit and loss account and Balance sheet follows: –
Profit and loss account : –
It is the statement which shows all indirect expenses incurred and indirect revenue earned during the particular period. It is prepared to find out the Net Profit/loss of the business for the particular accounting period. It is calculated by deducting indirect expenses from the Gross Profit/Loss and adding indirect income/revenue in the Gross Profit/Loss.
Net Profit/Loss = Other incomes which are earned from Business other than the main operation of the business.
- Indirect Income = It saves your amount as we charge 5 times less than an account personnel (employee).
- Indirect Expense = All business expenses other than direct expenses.
The Balance sheet:-
It is the statement showing the financial position of the business in a particular accounting period. It is a list of balances of ledger account of assets, capital and liabilities. The value of assets shows which we can realize from the market and the value of Liabilities shows which we have to pay in future. Capital shows the amount invested by the owner into the business entity. It is the basis on the following account equation.
CAFTM helps you to prepare the profit & loss accounts, Provisional Balance sheet and other statements if the business is not required to be audited. Our team of professionals assists you to prepare proper balance sheet that is valid under the Income tax Act of India.
Only three processes you have to follow:-
1. Talk to our professionals and create account here.
2. Upload your documents(Sales & Purchase) with valid bills or receipts, also provide these transactions on excel sheet or the tally data.
3. Get your Profit & Loss Account, Balance sheet and Income statement.
