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DK Essential Managers: Understanding Accounts by Stephen Brookson

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Understanding a Profit and Loss Account

The profit and loss account is an organization’s statement of earnings; it shows all the income minus expenses over the year. Make sure that you know how the profit and loss account is structured and what type of items are included.

DK Check how the accounting policies show that profit is measured.
DK Remember only “revenue” items appear in a profit and loss account.

Recording the past

The profit and loss account is a “history book” of the past year. It tells how well a business has performed, listing all ...

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