1 It is the first stage of final accounts.
2 It shows the gross result (gross profit or gross loss) of the business.
3 All direct expenses (expenses connected with purchase or production of goods) are considered in it.
Profit and Loss Account
1 It is the second stage of the final accounts.
2 It shows the net results (net profit or net loss) of the business.
3 All expenses connected with sales and administration (indirect expenses) of business are considered.