Distinguish between profit and loss account and profit and loss appropriation account


Difference between Profit and Loss A/c and Profit and Loss Appropriation A/c:
Basis Profit and Loss Account Profit and Loss Appropriation Account
Preparation  It is prepared after Trading A/c. It is prepared after Profit and Loss A/c.
Net Profit It shows the Net Profit of the year. It shows how Net Profit is appropriated (distributed).
Balances This account does not have opening and closing balances. This account may have both opening and closing balances.
Items Debited Items debited to this account are all expenses (charge against profit). Items debited to this account are appropriations.

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