CHAPTER 7 PROFIT & LOSS ACCOUNT AND BALANCE SHEET

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OBJECTIVES 7.1 The profit and loss account This chapter will enable the business owner to develop an understanding of: the profit and loss account the balance sheet preparation of the profit and loss account and balance sheet the advantages of financial statements. The profit and loss account is a very useful statement. It shows the performance of a business over a given period. A typical profit and loss account would look as shown in Fig. 7.1 below.

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