Profit and Loss account.

This account reflects the profit of the company for the financial year (or a period of 12 months). The first thing shown on the report is the sales volume in comparison with the goods sold during the period independently if the payment for this goods was effected or they are sold in credit. From this cost of sales the cost of sold goods is subtracted and we can see the gross profit of the company. Further all the expenses are subtracted and we receive the net profit.