alleryProfit and Loss Account begins with:
AGross Profit from Trading
BSales for the year
CNet Profit transferred
DOpening cash balance
Answer & Solution
Correct answer: A. Gross Profit from Trading
1. P&L Account opens with Gross Profit brought down from Trading Account.
2. Indirect incomes are added and indirect expenses subtracted.
3. Net Profit is the closing balancing figure of P&L.
_Source: ICAI BoS Foundation Paper 1, Ch 7 U1 "Final Accounts", §1.4 ¶1_
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