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pIf you are running a business you will need to report your business profit or loss. Depending on the size of your company, will depend on where you have to report to and the format you have to disclose it in. If your business is a limited company, plc or LLP then you will be required to register accounts with Companies House. Depending on the size of your turnover (not profit) will decide on exactly what data you must contain in these accounts and whether they have to be audited. If you are not a limited company, LLP or plc company but in partnership or a sole trader then you are not required file your accounts with Companies House (the Government Agency responsible for collating, registering and monitoring companies under the current legislation. Although partnerships and sole traders do not have to report their profits to Companies House, it is still necessary, along with all companies, to declare your profit or loss to H M Revenue amp; Customs. To be in a position to disclose to the Revenue and complete their required returns, you must have basic accounts prepared which will include a profit and loss account. The profit and loss account will disclose and support the figures which are described on your tax return. You may also notice that if you apply for any type of credit to a bank or finance company, they possibly could require for your last three years accounts and in particular will require to see a profit and loss account. What does a profit and loss account show?br /br /If you need to use your company bank account or are presented with a receipt for the business you should check for any personal spending or buying, whatsoever the item may be a title=womens jewelry href=http://www.womensaccessoriesshop.com/women%27s-jewelry.html target=_blankwomens jewelry/a or anything else for the home or family), then you need to make sure that it does not get included the accounts as company expenses.br /br /The profit and loss account brings together your business financial transactions and summarises them into helpful categories which can be reviewed.nbsp; They also summarise these to show if a profit or lossnbsp; has been made.nbsp; They will cover a specific time period, your accounting period, which is usually a year but can at times be longer or shorter, ie when you are just starting or finishing a business. The top section of a profit and loss account shows the money in for the business over a set time period and the bottom section will show the companys expenditure.nbsp;nbsp; Anyone can produce their own profit and loss account following this basis.br /br /Your income should then be split into two categories, one being turnover and the other being other revenue. Turnover or business sales is the total amount of your product sales or services in your financial year or period. It is important that you own a good scheme to record this information.nbsp;nbsp; You might make use of a computer software program which specialises in this, but you might also use easy computer spreadsheets or manual accounting books.br /br /supplementary revenue which needs disclosing consists of interest received from bank accounts, sale of any equipment you no longer call for, rental income to the business, or any cash you put into your business to cover its needs. A business will need to analyse their costs into three main headings which are business expenses, cost of equipment and cost of sales. A company will make costsnbsp; in the operation of creating or getting its product or service which it sells and these costsnbsp; get classified in the financial statements as cost of sales. All the expenditurenbsp; that are incurred in order that your company can run which includes rent, utilities, travel expenses, advertising expenses, administration and stationery costsnbsp; are all classified as business expenses. All companies need equipment in order for its company to run and the spending in relation to buying or leasing this equipment is included in the cost of equipment.nbsp; This will include computer equipment, furniture and company vehicles.br /br /You must make sure that you keep all your receipts separately specially in a title=womens purses href=http://www.womensaccessoriesshop.com/women%27s-purses.html target=_blankwomens purses/a for your personal shopping to any expenses incurred on behalf of your business.br /br /You can decide on the best accounting period for your company but in some instances it can be easier and simpler if your year end concludes on 31 March or 5 April. By deciding on the dates of 31 March or 5 April, it will help your accounting and tax return preparation easier as the info will coincide with each other. You can vary your year end so that it finishes on a date like 31 March by having a set of financial statements for a different time period, possibly a shorter time. You can choose which year end date you want to produce a set of accounts to that date rather than a completenbsp; twelve months, thus preparing a set of accounts which cover a period rather than a year. From then on you will complete yearly financial statements to the year end you prefer.br /br /All accounts should be supported by invoices and receipts as well as your ledgers. As a company you should make sure that you retain all your invoices and receipts to support your entries in your accounts fornbsp; the legal amount of time which is a minimum of six years.br /br /You should now be in a position to appreciate any profit and loss accounts that you look at and interpret the figures contained within them. br /br //p