Which of the following items is NOT recorded in profit and loss account?
Return outward
The correct answer is option 3. Return outward is not recorded in the profit and loss account because it is considered a reduction of the revenue. Return outward (also known as purchase returns) is a liability reduction or contra account to purchases and is usually recorded in the trading account, not in the profit and loss account. On the other hand, administrative expenses, depreciation, and profit on the sale of assets are all recorded in the profit and loss account.
Important Questions from Trading and Profit & Loss Account
The cost of goods sold is equal to:
Which of the following costs is NOT included while calculating the cost of the inventory?
A not-for-profit organization pays rent for the building at Rs. 1,000 per month. However, the rent for the last two months has not been paid. What will be the amount shown in the receipt & payment account and income & expenditure account, respectively?
Which of the following statements is INCORRECT in the context of Not-for-profit organizations?
Which of the following items is recorded in profit and loss appropriation account?
