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Importance of trading, profit and loss account

Answer Text:
Importance of trading, profit and loss account.
a) It gives a summary of the firm’s revenues and expenses during a particular trading period.
b) It is used by the government to calculate tax payable by the business.
c) It enables a firm to compare its financial performance in different trading periods or with similar businesses.
d) Used by the managers to make decisions on how to operate the firm.
e) Used by the owners to determine whether their investment is well managed.
f) Used by creditors and bankers to decide the amount of credit and loans to extend to a firm.