The subsequent items are debited in the profit and loss account as:

1. Administrative expenses comprising office salaries, office lighting, office rent, printing, director's fees, insurance, telephone rent, postage etc.

2. Sales  and  distribution  expenses  containing  sales men  salary,  travelling expenses, commission, advertising, royalty, packing expenses, etc.

3. Financial expenses including interest on loan or capital, cash discount permitted bad debts and bank charges and so on.

4. Depreciation of assets and different provisions.

5. Another expenses and losses comprising loss on sales of fixed assets, by theft, loss by fire and by accident etc.

6. Taxes comprising sales taxes and income taxes etc.

The subsequent items are credited in the Profit and Loss Account as:

1. Interest Received

2. Apprentice Premium

3. Cash Discount Received

4. Dividend Received.

 5. Gain on Sale of Fixed Assets

6. Rent Received

Note: The personal and household expenses of the proprietor paid through the firm do not show in the profit and loss account. Quite these are reacted as personal drawings of the proprietor and are deducted by the capital into the balance sheet.