Profit And Loss Interview Question:

Explain the components of Profit and Loss Account?

Submitted by: Administrator

All expenses, losses, incomes and gains are the components of Profit and Loss Account:

Expenses and losses are shown on the debit side of Profit & Loss Account. Following is the list:

Administrative Expenses:

* Office Salaries
* Postage & Telephone
* Traveling & Conveyance
* Legal Charges
* Office Rent
* Depreciation
* Audit Fees
* Insurance
* Repairs & Renewals

Selling and Distribution Expenses:

* Advertisement
* Carriage Outward
* Free Samples
* Bad Debts
* Sales Commission

Incomes and Gains are shown on the credit side of the Profit & Loss Account. Following is the list:

Gross Profit (balance forwarded from the Trading account)

Other Income:

* Discount received
* Commission received
* Non-Trading Income
* Interest received
* Bad Debts recovered
* Rent received
* Profit on the sale of assets
Submitted by: Administrator