A profit loss statement is also known as Income statement and it is one of the statements of Financial statements of a company. A financial statement is written on accrual basis. It shows the expenses of a company incurred to earn the revenues. On the top of the statement, the revenue comes which can be a sales revenue or a net sales revenue. In the case of the net revenue it is sales revenue minus sales tax. After writing the revenue the Cost of goods sold are deducted and gross profit comes. From the gross profits all operating expenses are deducted to determine the operating income. From operating income other expenses are deducted like interest and taxes. The final figure is the net income which the company earns without deducting all of its profits. In this way the complete profit and loss statement is written.
