differentiate between trading and profit and loss account AND statement of profit and loss

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Solution

Gargi, the solution to your query is here.

S.No. Statement of Profit and Loss Trading and Profit and Loss Account

1 It is prepared under the Single Entry System of accounting. It is prepared under the Double Entry System of accounting.

2. It is a statement having two columns i.e. ‘Details’ and ‘Amount’ . It is a ‘T’ shaped account, having two sides i.e. ‘Debit’ and ‘Credit’.

3. Net Profit/Net Loss calculated as follows.

Adjusted Closing Capital > Opening Capital = Net Profit
Adjusted Closing Capital < Opening Capital = Net Loss Net Profit/Net Loss calculated as follows.

Indirect Incomes > Indirect Expenses = Net Profit
Indirect Incomes < Indirect Expenses = Net Loss

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S.No.	Statement of Profit and Loss	Trading and Profit and Loss Account
1	It is prepared under the Single Entry System of accounting.	It is prepared under the Double Entry System of accounting.
2.	It is a statement having two columns i.e. ‘Details’ and ‘Amount’ .	It is a ‘T’ shaped account, having two sides i.e. ‘Debit’ and ‘Credit’.
3.	Net Profit/Net Loss calculated as follows. Adjusted Closing Capital > Opening Capital = Net Profit Adjusted Closing Capital < Opening Capital = Net Loss	Net Profit/Net Loss calculated as follows. Indirect Incomes > Indirect Expenses = Net Profit Indirect Incomes < Indirect Expenses = Net Loss