Question

Net profit is calculated in which of the following accounts?

Answer 1

(A) Profit and loss account

(B) Balance sheet

(C) Trial balance

(D) Trading account

Answer: (A) profit and loss account

Explanation: Net profit is calculated in the profit and loss account. The profit and loss account is a part of the balance sheet, after making all the necessary adjustments of income and expenses. All financial statements are prepared at the end of each financial year.