What is the difference between a profit and loss account and a balance sheet?

Question

Accepted Answer

The profit and loss account shows the company's revenues, expenses, and net profit or loss for a specific period. The balance sheet provides a snapshot of the company's assets, liabilities, and equity at a specific point in time.

Profit and loss account shows the financial performance of a company over a specific period, usually a year.
It includes revenues, expenses, and the resulting net profit or loss.
Balance sheet shows the financial position of a company at a specific point in time.
It includes assets (what the company owns), liabilities (what the company owes), and equity (the difference between assets and liabilities).
The profit and loss account is dynamic and changes with each accounting period, while the balance sheet is static and represents a single point in time.
Example: A profit and loss account may show that a company had $1 million in revenues, $800,000 in expenses, and a net profit of $200,000 for the year. The balance sheet may show that the company has $500,000 in assets, $300,000 in liabilities, and $200,000 in equity at the end of the year.

Accepted Answer

P&l shows   income and expenditure. Balancesheet shows Assets &Liabilities