Question

Give one word/ term or phrase for each of the following statements.
Account prepared on the basis of indirect expenses and indirect income of the business.

Answer 1

Profit and loss account is prepared on the basis of indirect expenses and indirect incomes of the business. Profit and loss account is prepared to ascertain the annual profit or loss of the business. All the indirect expenses and incomes are recorded whether paid in cash or not. Only current year items are considered while preparing this account.