The Account which shows Net Profit or Net Loss of the business is _____________ .

Trading Account

No worries! We‘ve got your back. Try BYJU‘S free classes today!

Profit and Loss Account

Right on! Give the BNAT exam to get a 100% scholarship for BYJUS courses

Cash Account

No worries! We‘ve got your back. Try BYJU‘S free classes today!

Capital Account

No worries! We‘ve got your back. Try BYJU‘S free classes today!

Open in App

Solution

The correct option is B Profit and Loss Account
Net profit or net loss is the amount that is left in the hands of firm after deducting all expenses and adding all the incomes. For this only Profit and Loss account can be used because it records all the expenses as well as incomes and uses gross profit/loss to calculate net profit/loss.

Suggest Corrections

Similar questions

State whether the following statement are true or false.

1. Final Accounts are prepared on the basis of Trial Balance.
2. Trading Account is a part of Profit & Loss Account.
3. Profit Loss Account is prepared to find out Gross Profit or Gross Loss.
4. Gross Profit or Gross Loss is transferred to Balance Sheet.
5. An amount of net profit is added to the capital.
6. All indirect expenses are debited to trading account.
7. Balance Sheet is a statement and not an account.
8. Capital account is a personal account.
9. Amount of prepaid expenses appears on assets side.
10. Bank Overdraft is a liability of business concern.

Q. State whether the following statement are True or False.

Credit balance of profit and loss account shows net profit of the business.

Q. Which are the accounts which are not balanced but transferred to Trading A/c or Profit &loss A/c?

Q. account tells whether the business entity has earned a profit or loss.

Q. Select the most appropriate alternative from those given below and rewrite the statement.

To find out net profit or net loss of the business _________________ account is prepared.
a) trading
b) capital
c) current
d) profit and loss

Join BYJU'S Learning Program