Profit & Loss Account (Trading & P&L)

1. Mechanics of the Profit & Loss Account

The Profit & Loss Account determines whether business operations over a specific period resulted in a Net Profit or a Net Loss. In TallyPrime, it is organized into two stages:

• Trading Section: Compares Direct Incomes (Sales) against Direct Expenses (Opening Stock, Purchases, Freight/Wages) to calculate Gross Profit.
• Profit & Loss Section: Adds Indirect Incomes (Discount received, Interest) and subtracts Indirect Expenses (Office Rent, Salaries, Electricity, Depreciation) from Gross Profit to arrive at Net Profit.

2. Viewing P&L in TallyPrime

Press P on Gateway of Tally. Press Alt + F5 for Detailed View. Press F2 to set period from 01-Apr-2024 to 02-Apr-2024.