Depends on the System being used.
For Example:- Few of the old systems had two Net Profit A/cs (possibly latest as well). One would go in P&L A/c and One in B/S (in Reserves & Surplus).
When the year was over, accountant would pass an entry debiting Net Profit (P&L A/c) and Crediting Net Profit (B/S A/c). The amount would be for the Net Profit for the year. This would make the balance in P&L ZERO, and move it to B/S. The B/S GLs would then get carried forwarded to Next Year's Opening Balance.
If you are auditing and want to find out what this GL is for, go through the entries and analyse what it's doing.
Profit & Loss a/c is a nominal account.
| Originally posted by : Sayantan Datta | ||
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I am asking whether it is real or personal account or nominal account ?? |  |
PERSONAL A/C , REAL A/C , NOMINAL A/C , VALUATION A/C
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