The following are the main differences between
Income &Expenditure Account and Profit &Loss Account.
The account is maintained by non-trading Concern. But Profit &Loss Account is maintained only by business Concern.
Income &Expenditure is a revenue account prepared at the end of The accounting period for finding out the surpluses or deficit of that period.
Whereas Profit &Loss Account prepared at the end of the accounting The period for measuring net Profit or Net Loss.
In the case of a non-trading concern the surplus of an accounting periodcannot be withdrawn by the members, it is added to the general fund.
But the net profit of a trading concern may be withdrawn wholly or partly by the owners.
For preparing Income &Expenditure Account the Concern need not, follow any act. |But the Profit &Loss Account has to be followed by the provision of Companies Act, 1956.
The credit balance of Income &Expenditure Account is called "Excess of Income over Expenditure" and Debit balance is called "Excess of Expenditure on Income."
But the Credit balance of the profit &Loss Account is called 'Net profit" and Debit balance is called 'Net Loss'.
The Income &Expenditure Account is prepared from Receipt &payment account or other related information.But Profits &Loss Account in prepared from Trial Balance.
