Question

Select the most appropriate alternative from those given below:
Credit balance of Profit and Loss A/c indicates _______ .

• A. Gross Profit
• B. Gross Loss
• C. Net Profit
• D. Net Loss

Answer 1

The correct option is C Net Profit

Net Profit is a profit which is generated by deducting all the indirect expenses from gross profit . Excess of income over expenditure in profit & loss account is called as net profit.

Profit & Loss Account

Particulars Amount Particulars Amount

To Salary 10000 By Gross Profit 70000

To Rent 35000

To Insurance 10000

To Indirect Expenses 10000

To Net profit 5000

------------- ----------------

70000 70000

--------------- ------------------