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Although the meaning of both the terms either you call it Income-Expenditure statement or you may call Profit-Loss Statement, yet there is some confusion in its practical use. Can some one clarify what's the difference of use?
Difference is of terminologies.
In NPO. Income and Expenditure statement is prepared and in non NPOs P&L is made.
There are other diference also like net profit/loss is called surpul/deficit for NPOs
Revenues and expenses are related to the core business but the other expressions are more general
When you prepare the P&L of a not for profit organisation or charitable org it is called income & expenditure a/c as the org is not for earning profit. Whereas for businesses it is called profit & lossa/c.
Income: is Revenue generated from normal opration
Expenditure: is the expences incured to create the income
Profit: is the the posetive difference amount calculated after expenditure is deducted from revenue
Loss:is the the negative difference amount calculated after expenditure is deducted from revenue
The terms Income and Expenditure and Profit and Loss are much the same in accouting. As Profit and Loss clearly differientiate both the income and expenses in the columnar form. The Debit side of Proft And Loss account denotes all the expenses incurred by the company for the financial year and Credit side dnotes all the income generated by the company during the financial year
Income and Expenditure Account is prepared for Non-Government Organisations in its profit is called excess of Income over Expenditure. Profit and Loss account is prepared for Business Enterprises, which may Profit / Loss on Businesses.
In I/E Account Incomes are recorded on the left side, and expenditures are recorded on the Right side, and P&L Accounts is just opposite of I/E Account.
Income and expenditure account is account which is prepared for finding the excess of income over expenditures or excess of expenditures over incomes. Profit and loss account is the account which is prepared for finding net profit or net loss.
Income is the revenue the organization encounters after it sells the product or service offering while the expenditures are the costs it pays.
income and expendiure account is prepared by non profit orgaanization and profit and loss account is prepared by profit seeking organization.
1. It is a nominal account, prepared for the purpose of calculating surplus (excess of income over expenditure) or deficit (excess of expenditure over income) of non-profit organizations.
2. The major source of income is subscriptions, donations and grants.
3. The surplus or deficit is not distributed among the members of non-profit organizations; rather it is added to the capital fund.
4. Final accounts are prepared from Receipts and Payments Account and additional information.
1. It is nominal account, prepared for the purpose of calculating net profit or net loss of business enterprises.
2. The major source of income is the revenue received from sale of goods or rendering services by the business enterprise.
3. The net profit or net loss is distributed among the owners of business enterprises.
4. Final accounts are prepared from Trial Balance and additional information.
Income and Expenditure are continuous in nature and Profit or loss are either refer to particular time (Daily, Monthly, yearly) or for a single time deals.
