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The Complete Idiot's Guide® To Accounting by Lita Epstein, Shellie L. Moore

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Developing Profit and Loss Statements

The P&L statement summarizes your financial transactions during any given period, whether monthly or yearly. By looking at this statement, you can quickly tell whether the business is operating at a profit or a loss. Also, most of the information you need to file tax returns for local, state, and federal government entities is collected in the same accounts as those earmarked for the P&L statement. Clearly the data collected for the P&L statement provides the fuel you need to run the business.
There are three parts to a P&L statement: income, cost of sales, and expenses. Just like the balance sheet accounts in Chapter 2, the accounts in this part of the chart of accounts are listed based on how they appear ...

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