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Select the most appropriate alternative from those given below and rewrite the statement.

To find out net profit or net loss of the business __________ account is prepared.

Options

  • Trading
  • Capital
  • Current
  • Profit and loss

1 Answer

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Best answer

To find out net profit or net loss of the business, Profit & Loss Account is prepared.

Explanation: Trading account only discloses the gross profit earned/loss incurred. But a businessman is more interested in knowing the overall profit or loss of the business. So, a Profit & Loss Account is prepared to ascertain the net profit earned or net loss incurred at the end of the accounting period.

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