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Profit & Loss Account


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What is the distinction between dividends, drawings and salaries?


Equations are omitted for technical reasons - download the original pdf

Dividends are paid to shareholders. Dividends are drawn from profits. A proportion of the profits are paid to the shareholders who by owning shares own the company. Drawings are sums of money taken by the owners of the company (the directors) as and when needed to meet their personal needs.
Contents of
Profit & Loss Account

1 Financial Accounts; Direct and Indirect Costs
2 Profit and loss
3 What is the distinction between dividends, drawings and salaries?
4 What is non-operating income? How is non-operating income generated? Why isn't
5 Why is it desirable for businesses to have retained profits?

Related articles: (1) Cash Flow Management, (2) Profit & Loss Account