Operating expenses up.
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Operating expenses up.
high wages on adverting and this statement shows net gross loss
This chart is rather confusing if I do say so myself
@Alexander Agyei Amankwah, Agreed! The rent stands as fixed. The depreciation of motor vehicle and Office equipment are to be treated in PLC account.
According to the table, there is an increase in sales and the money was deposited at the bank. leading to an increase in bank balance, on the other hand there is a loss due to increase in expenses.
The business is at a loss due to less sales.
There is an increase in the bank balance because the depreciation expenses does not necessarily involve a payment of cash with that specific period/time.
Gross profit less than running expenses cause by the very high cost of the goods sold thus a loss.How can such a situation be checked?
depreciation of an asset does not affect profit and loss account.It appears on a balance sheet.A loss of 300 was made according to profit and loss statement.Total depreciation showing on a profit and loss statement is also 300.The business broke even.Then rent 800 is an asset.It should be in the bank and appear under current assets on a balance sheet.and not profit and loss unless it is the line of business.Hence increased bank balance.
Accounting - The Profit and Loss statement example
The Profit and Loss statement example
Profit and Loss statement for the month ending 31 May
- COST OF GOODS SOLD
- OPERATING EXPENSES
Depreciation of motor vehicles
Depreciation of office equipment
NET PROFIT AND LOSS
In the example above the business makes a loss and the loss has to be
transferred to the balance sheet. Explain why the business makes a loss yet
the balance for bank has increased.
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