A profit and loss account is a financial statement showing the net profit or loss of the employment for a period of time. It shows the gross profit of the business less the total costs incurred during the period of the account. These costs are referred to as expenses and should be itemised, for example as rent, rates, gas and electricity.
Profit and loss account for year ending 31.12.98 £
Gross profit (from trading account) 12,800
Less expenses
Wages and office service 955
Selling and advertising 97
Telephone & telex 906
Less private proportion 117 789
Rent 420
Printing, postage & stationery 333
Bank interest 2,421
Bank charges 527
Subsistence & travel 37
Motor expenses 2 ,141
Less private proportion 214 1,927
Repairs & renewals 27
Legal & profession 40
Subscriptions 89
Sundry expenses 53
Depreciation - car 100
- fixtures and fittings 150
Total Expenses 7,855
Profit for the period 4,945
Note Some of the expenses shown would not be allowable. With
others the decision maker would need to be satisfied that they were
allowable expenses (DMG35001).
