Profit and loss report in Bokio
As its name suggests, the profit and loss report shows the profit or loss for a specific period. The profit or loss is obtained by adding up all the income for the period, then subtracting all the expenses for the period (income - expenses = profit or loss). The profit and loss report is compiled to enable comparisons with previous fiscal years. The bookkeeping accounts starting with 4 are under “Income”, accounts starting with 5, 6, 7 or 8 are under “Costs”. These are known as profit and loss accounts.
The profit and loss report summarises what has happened in the business over a certain period, whereas the balance report shows the position at a single point in time. Together with the balance report, the profit and loss report provides a useful overview of how the company is performing.