-Harsha Lal- ACW Accounts at Edumarz
Answer- Every businessman wants to know whether his business is in profit or running in losses. For this he calculates the profit or loss at the end of the year. To ascertain the profit or loss the steps are:-
Firstly add up all the incomes of the year
Then add up all the losses of the year
Subtract the total losses from the total income , what we are left with is the Net profit or loss of that accounting year.