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P2 C5 Financial Statements of Business Organisations — Account STD 11 Commerce — Question

Gujarat BoardEnglish MediumSTD 11 CommerceAccountP2 C5 Financial Statements of Business Organisations3 Marks
Question
Explain objectives of Profit & Loss Account.
✓

Answer

The objectives of Profit and Loss account are as follows:
$(1)$ Profit and Loss Account is prepared to know net profit or net loss of the business.
$(2)$ Through profit and loss account, administrative expenses, selling and distribution expenses, financial expenses and other expenses are losses can be known.
$(3)$ The capital will be increased by net profit and it will be decreased by net loss.

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