profit and loss account

Definitions

Accounting

  • noun the accounts for a company showing expenditure and income over a period of time, usually one calendar year, balanced to show a final profit or loss.

Economics

  • noun the accounts for a company with expenditure and income over a period of time, almost always one calendar year, balanced to show a final profit or loss. The balance sheet shows the state of a company’s finances at a certain date. The profit and loss account shows the movements which have taken place since the end of the previous accounting period, i.e. since the last balance sheet. A profit and loss account can be drawn up either in the horizontal or in the vertical format; most are usually drawn up in the vertical format, as opposed to the more old-fashioned horizontal style, but both styles are allowed by the Companies Act.

Law

  • noun a statement of a company’s expenditure and income over a period of time, almost always one calendar year, showing whether the company has made a profit or loss
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