Key Elements of the Profit of Loss Account
Key Elements of the P&L a/c and the Balance Sheet
Sales: This is income got after the business is finished selling goods or services. Sales in PPP determine whether a company makes a profit or loss.
2014
2013
£100,250
£105,800
Cost of Sales: These are the costs a business obtains from making direct sales. In PPP is to know how much the making of the pizza has cost in order to have a selling price.
2014
2013
£47940
£51750
Opening Stock: These are goods that a PPP starts with at the start of the selling period. PPP needs to have opening stock in order to run, without opening stock PPP cannot make any pizzas therefore cannot make a profit.
2014
2013
£5,500
£6000
Purchases: Purchases is the income generated by selling goods and services. PPP’s purchases are made by customers buying pizzas.
Closing stock: These are goods that a company has after it has finished trading. For example if PPP has some stock of onions left then that is its closing stock.
2014
2013
£2,500
£4,000
Gross Profit: Gross profit is cost of sales minus turnover. PPP uses the gross profit to see if the company has been successful in its accounting period.
2014
2013
£52310
£54050
Expenses: These are the costs PPP has to pay while running the business. For example: wages, bills and advertising.
Net before tax: This is defined as PPP’s profit before it pays it has paid its taxes
2014
2013
£3000
£9690
Fixed Assets: These are things owned by PPP over a long period of time. Fixed assets help PPP to carry out its work efficiently over a long period of time. PPP’s fixed assets include: its machinery which it will use in the long term to make its pizzas.
2014
2013
£35,000
£38,000
Current Assets: These are goods or services used or owned by PPP within the year. PPP uses its current assets on a daily basis. PPP’s current assets include its stock and debtors.
2014
2013
£14,810
£15,750
Debtors: Debtors are people who owe PPP money. For PPP having debtors is good because it means it has
Sales: This is income got after the business is finished selling goods or services. Sales in PPP determine whether a company makes a profit or loss.
2014
2013
£100,250
£105,800
Cost of Sales: These are the costs a business obtains from making direct sales. In PPP is to know how much the making of the pizza has cost in order to have a selling price.
2014
2013
£47940
£51750
Opening Stock: These are goods that a PPP starts with at the start of the selling period. PPP needs to have opening stock in order to run, without opening stock PPP cannot make any pizzas therefore cannot make a profit.
2014
2013
£5,500
£6000
Purchases: Purchases is the income generated by selling goods and services. PPP’s purchases are made by customers buying pizzas.
Closing stock: These are goods that a company has after it has finished trading. For example if PPP has some stock of onions left then that is its closing stock.
2014
2013
£2,500
£4,000
Gross Profit: Gross profit is cost of sales minus turnover. PPP uses the gross profit to see if the company has been successful in its accounting period.
2014
2013
£52310
£54050
Expenses: These are the costs PPP has to pay while running the business. For example: wages, bills and advertising.
Net before tax: This is defined as PPP’s profit before it pays it has paid its taxes
2014
2013
£3000
£9690
Fixed Assets: These are things owned by PPP over a long period of time. Fixed assets help PPP to carry out its work efficiently over a long period of time. PPP’s fixed assets include: its machinery which it will use in the long term to make its pizzas.
2014
2013
£35,000
£38,000
Current Assets: These are goods or services used or owned by PPP within the year. PPP uses its current assets on a daily basis. PPP’s current assets include its stock and debtors.
2014
2013
£14,810
£15,750
Debtors: Debtors are people who owe PPP money. For PPP having debtors is good because it means it has