profit and loss
- Created by: naomicsuter
- Created on: 22-03-16 10:18
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- Profit & Loss
- Purpose
- summarises all the sales revenue for the financial year
- summarises all the payments or expenses for the same year
- difference between the two totals is the profit and loss made in that year
- Why produce a profit and loss account?
- legal requirement. tax is paid on the profit
- summarises all the years transactions - as recorded in documents such as invoices
- shows the 'financial health' of a business
- studied by managers, employees, shareholders, financiers, customers and other groups of stakeholders
- Computers in profit and loss
- spreadsheets can be used to complete profit and loss accounts
- business account packages automatically produce profit and loss accounts
- advantages include: speed, accuracy, instant access to information
- Purpose
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