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    Profit and Loss

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    Sakthivel Gounder
    The document discusses key concepts related to profit and loss in business. It defines cost price, profit, loss, selling price, marked price, trade discount, cash discount, commission, and brokerage. Cost price is the amount paid to purchase an item while profit is the excess of selling price over cost price. Loss is the excess of cost price over selling price. Selling price includes profit or loss.

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    © All Rights Reserved
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    Profit and Loss

    Uploaded by

    Sakthivel Gounder
    13 views6 pages
    The document discusses key concepts related to profit and loss in business. It defines cost price, profit, loss, selling price, marked price, trade discount, cash discount, commission, and brokerage. Cost price is the amount paid to purchase an item while profit is the excess of selling price over cost price. Loss is the excess of cost price over selling price. Selling price includes profit or loss.

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    ProfitAndLoss.pptx

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    The document discusses key concepts related to profit and loss in business. It defines cost price, profit, loss, selling price, marked price, trade discount, cash discount, commission, and brokerage. Cost price is the amount paid to purchase an item while profit is the excess of selling price over cost price. Loss is the excess of cost price over selling price. Selling price includes profit or loss.

    Copyright:

    © All Rights Reserved
    Download as PPTX, PDF, TXT or read online from Scribd
    Download as pptx, pdf, or txt
    13 views6 pages

    Profit and Loss

    Uploaded by

    Sakthivel Gounder
    The document discusses key concepts related to profit and loss in business. It defines cost price, profit, loss, selling price, marked price, trade discount, cash discount, commission, and brokerage. Cost price is the amount paid to purchase an item while profit is the excess of selling price over cost price. Loss is the excess of cost price over selling price. Selling price includes profit or loss.

    Copyright:

    © All Rights Reserved
    Download as PPTX, PDF, TXT or read online from Scribd
    Download as pptx, pdf, or txt
    of 6

    Profit and Loss

    1 Concepts in Profit and Loss


    Introduction

     The aim of every business is to earn profit.

     Every trader tries to sell the goods at a price higher than their cost, so that he may
    earn a profit.

     Sometimes, however he may be forced to sell them at less than the cost, in which case
    he suffers a loss.

     Thus the excess of selling price over the cost price is profit, and the excess of cost price
    over the selling price is loss.
    2.1. Concepts in Profit and Loss
    Cost Price

    Brokerage Profit

    Commission Loss
    Concepts in Profit
    and Loss

    Cash
    Selling Price
    Discount

    Trade Marked
    Discount Price
    2.1. Concepts in Profit and Loss
    1) Cost Price (C.P) :
    When a person pays amount to purchase an article, transport charges, octroi charges etc.
    Then the total amount paid is called as cost price.

    2) Profit :
    The excess of selling price over the cost price is known as profit. Profit is always calculated on
    cost price. When a shopkeeper purchase an article for Rs.100 and sells the same article for
    Rs125 then he earns a profit of rs.25.

    3) Loss :
    The excess of cost price over the selling price is known as Loss. Loss is always calculated on
    cost price. When a shopkeeper has purchased a certain article from wholesaler or
    manufacturer and if the price fall down. In such case the shopkeeper is forced to sell the
    article at as price less than cost price.

    4) Selling Price (S.P) :


    Total amount realised by selling an article is called as selling price of that article. Selling
    price includes profit or loss.
    2.1. Concepts in Profit and Loss
    5) Marked Price (M.P) :
    The printed price of an article or catalogue price for which the consumer gets the article is
    called as Marked price. This price is also known as list price or Catalogue price.

    6) Trade Discount :
    Discount is a deduction for the sale value of goods allowed by the seller to the buyer. traders
    who buy good in large quantities from manufacturers or wholesalers are generally given an
    allowance on the list price of the goods. This is known as trade discount.

    7) Cash Discount :
    Cash Discount is a deduction allowed by a creditor to a debtor on the amount due from the
    latter, if he settles the account within a specified time. This is a sort of incentive for the debtor
    to pay early. The seller who has sold goods on credit thus gets back his money early so that
    he can use it for further business. Sometimes,a buyer may get benefit of both discounts in
    such a case.
    2.1. Concepts in Profit and Loss
    8) Commission :
    The remuneration paid by the manufacturer to the agent is called as commission. Commission
    is always paid on selling price. The rate of commission is usually in the form of percentage of
    the value of transaction. It may be uniform for the entire amount or it may vary after certain
    amount of sale.

    9) Brokerage :
    In some transactions agents charge commission to the seller as well as to the buyer. They are
    called as ‘brokers’ and the commission in such cases is termed as brokerage. The brokers work
    in the field of purchasing and selling of shares, debentures, bonds, vehicles etc.

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