TERM: 2ND TERM
SUBJECT: BUSINESS STUDIES
CLASS: JSS 3
�
WEEK FOUR
TOPIC: � PROFIT AND LOSS ACCOUNT�
Content:
�
Profit & Loss Account: This is an account prepared after the preparation of the Trading Account. It is debited with all operational expenses and credited with the gross profit and all other revenue accruing to a business.
Purpose of Preparing the Profit & Loss Account
The P&L account is prepared either to ascertain net profit or net loss.
�
Worked Example:
Question: From the trial balance of Diligent Stores Ltd above, you are required to prepare the Profit and Loss Account of the company for the year ended 31st December, 2009.
Solution�
���������������������������������������������DILIGENT STORES LTD
������������������Profit & Loss Account for the year ended 31st December 2009.
� | N | � | N |
Less EXPENSES | � | Gross profit brought down from Trading | 7, 165 |
Carriage outwards | 200 | Account | 7, 165 |
Salaries and wages | 3, 862 | � | � |
Rent | 304 | � | � |
Insurance | 74 | � | � |
Sundry Expenses | 664 | � | � |
Advertising | 216 | � | � |
General Expenses | 480 | � | � |
Net Profit | 1, 361 | � | � |
� | 7, 165 | � | 7, 165 |
EVALUATION
�
READING ASSIGNMENT
�Business Studies by O.A. Lawal. Pages 77 to 80
�
GENERAL REVISION QUESTIONS
�
WEEKEND ASSIGNMENT
�
THEORY
�
� Lesson Notes All Rights Reserved 2023