What is the difference between P&L and P&L adjustment account? Is P&l Adjustment Account and P&L appropriation Account is Same is same? Thanks in advance.:confused:

There are three stages:-

Profit and Loss Account first stage. What is termed to be first closure.

Profit and Loss Adjustment Account second stage .
Here one incorporates the adjustments at balance date that are needed
To sophisticate the first closure.
These are called Balance Date Adjustments.
Accruals come into play here.

Profit and Loss Appropriation Account.
This is the third and final closure.
When the second tier is closed.
Decisions are made as to how the distribution takes place.
Some profit can be distributed, the balance is carried forward in the Balance Sheet.

Rolcam

p&l adjustment is an a/c prepared to rectify the errors found when the books of that year has been closed,i.e. errors are identified in next year or later

For eg---sales book overcast by rs 2000 &error identify next year, now if we debit sales then our present year profit will be undercasted ,thus in order to avoid this problem we open p&l adjustment a/c & debit or credit it instead of all NOMINAL A/Cs. i.e. in this case our entry will be
p&l adjustment a/c Dr. 2000
To suspense a/c 2000


akshay aggarwal
[email protected]

p&l adjustment is an a/c prepared to rectify the errors found when the books of that year has been closed,i.e. errors are identified in next year or later

For eg---sales book overcast by rs 2000 &error identify next year, now if we debit sales then our present year profit will be undercasted ,thus in order to avoid this problem we open p&l adjustment a/c & debit or credit it instead of all NOMINAL A/Cs. i.e. in this case our entry will be
p&l adjustment a/c Dr. 2000
To suspense a/c 2000


akshay aggarwal
[email protected]

p&l adjustment is an a/c prepared to rectify the errors found when the books of that year has been closed,i.e. errors are identified in next year or later

For eg---sales book overcast by rs 2000 &error identify next year, now if we debit sales then our present year profit will be undercasted ,thus in order to avoid this problem we open p&l adjustment a/c & debit or credit it instead of all NOMINAL A/Cs. i.e. in this case our entry will be
p&l adjustment a/c Dr. 2000
To suspense a/c 2000


akshay aggarwal
[email protected]

Please watch out for the dates on posts. The search tends to drag up old stuff. There is not enough activity on this forum that you cannot find even stuff a week old within the last 3-4 pages.