View source for The Statement of Profit or Loss

The statement of profit or loss (otherwise known as the profit and loss account) shows if a [[business]] is in [[profit]] or [[loss]]. It does this by showing the day to day [[income]] a business has received and all the day to day [[Expense|expenses]] the business has incurred over a given period.

The business has made a [[profit]] if the total income is more than the total expenditure. If on the other hand the total expenditure exceeds the total income the business has made a [[loss]].

The statement of profit or loss can be summed up by the following [[equation]]:

'''Profit = Income - Expenses'''