Question

What is the basic difference between PL account and PL apporpriation account?

Answer 1

Difference between Profit and Loss A/c and Profit and Loss Appropriation A/c:

S.No	Profit and Loss Account	Profit and Loss Appropriation Account
1	It is prepared after Trading A/c.	It is prepared after Profit and Loss A/c.
2	It shows the Net Profit of the year.	It shows how Net Profit is appropriated (distributed).
3	This account does not have opening and closing balances.	This account may have both opening and closing balances.
4	Items debited to this account are all expenses (charge against profit).	Items debited to this account are appropriations.