Which of the following item is not treated in the profit and loss account?
Office expenses
Salaries and allowances
Carriage inwards
Discounts allowed
Correct answer is B
A profit and loss account will include your credits (which includes turnover and other income) and deduct your debits (which includes allowances, cost of sales and overheads). These are used to find your bottom line figure – either your net profit or your net loss.