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Both the parts, Profit and Loss Account and Trading Account of last account are interdependent upon each other. Gross Profit or loss plays a very important role in the calculation of net figure of Profit and loss. Trading and profit and loss account provides the true picture of an organization through showing its revenues and expenses. Such account is normally prepared at the ending of the accounting period. Balance Sheet like we have observed is one of the most significant financial statements. This is a periodic summary of the financial position of the business. This is the statement of assets, owners and liabilities' capital at an exacting point in time. Such statement in itself does not reveal anything regarding the details of the operations of the business. Though, a comparison of two balance sheets could reveal the modifications in business position. A realistic understanding of the operations of the business would need two other statements: Cash Flow Statement and Funds Flow Statement. We shall acquire them up in subsequent sections.
how can a poorly controlled budget cause problesm for a business?
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behavioral aspect of standard costing
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