Profit and loss account

A profit and loss account is a financial statement that summarizes the financial transactions for a business over a period in time. In reference to charitable organisations it is sometimes known as an Income and Expenditure[?] account.

In the United Kingdom the regulation for partnerships, sole traders, charities and chartered institutes allows a degree of flexibility in the presentation of profit and loss accounts. However there is tight regulation over the presentation of limited companys, which is set out in the Companies Act 1989[?]. Example A typical profit and loss account for a limited company may look similar to the one shown below.

Profit and Loss Account for the year ended date - month - year

 Sales............................................................10,217,880 
 Cost of sales[?].....................................................5,468,000
                                                                   _________ 
 Gross profit[?]......................................................4,749,880
 Net Operating Expenses[?] (see note 1)...............................2,333,605 
                                                                   __________
 Profit on ordinary activities before taxation and interest........2,416,275 
 Interest payable......................................................5,250 
                                                                   __________
 Profit on ordinary activities before taxation.....................2,411,025
 Taxation..........................................................1,080,000
                                                                   __________
 Profit for the financial year.....................................1,331,025
 Dividends[?] Paid......................................................140,000
 Dividends[?] Proposed...................................................75,000
                                                                   __________
 Retained Profit[?] for the financial year............................1,116,025

 Note 1 
 Operating Expenses 
 Depreciation[?]................1,211,426 
 Wages[?] and NI[?]..................908,110 
 Administration expenses.......126,390 
 Distribution Costs.............87,690 
                                _______ 
                             2,333,605