P/L Account
It is a financial statement that summarizes and analyzes the cost, revenue, and other expenses of a firm for the certain period of time. During the preparation of P/L account, It includes various operating, non-operating and other financial headings.
Major headings of P/L Account
Interest income on bank’s investment or on loan and advances
Interest expenses incurred while paying interest to depositors
Net income interest after interest expenses deducted from interest income
Fee & commission income on the services provided by a firm
Fee & commission expenses while providing services to general public
Net Fee & commission income after deduction of Fee & commission expenses from Fee & commission income
Net trading income by deducting all allowable business, capital allowance, and other trade loss from gross trade income
Operating income generates from the operating activities of the bank
Other operating income from other operating activities which are not related to the principal activities of the bank
Operating expenses incurred while managing and providing services
Loan loss provision fund for estimated loan loss in near future
Net operating income after deducting loan loss provision from total operating income
Profit before tax is the result of adding non operating income and subtracting non operating expenses
Net profit is the final result of the income statement after deducting taxes from profit before tax
Profit and loss statement or income statement provides valuable and crucial information about a firm. It helps management to evaluate the performance of a firm and gain control over unnecessary expenses incurred in a firm.
