Legal Definitions - profit-and-loss account

A profit-and-loss account is a type of accounting statement that shows all the income and expenses of a business over a certain period of time. It is also known as an income statement. The purpose of this statement is to determine the net profit or loss of the business during that period.

For example, if a business has $10,000 in revenue and $8,000 in expenses in a month, the profit-and-loss account will show a net profit of $2,000 for that month. This statement is important for businesses to track their financial performance and make decisions about future investments or changes in operations.