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| P&L account reports the profit generated for an accounting period. | P&L appropriation account shows how the profits will be distributed to relevant aspects such as dividend payments and reserves. |
| Preparation | |
| P&L is an account prepared by all types of businesses. | P&L appropriation account is prepared by partnerships and companies. |
| Opening Balance and Closing Balance | |
| P&L is prepared for a specific accounting year, thus does not have an opening balance and closing balance. | P&L Appropriation Account is brought forward from the previous year and will be carried forward to the next, thus have an opening and closing balance. |
Posted by Abhishek Sharma 6 years, 1 month ago
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Yogita Ingle 6 years, 1 month ago
It is the reputation of a firm which enables it to earn higher profits in comparison to the normal profits earned by other firms in the same business.
There are two distinct types:
- Purchased: Purchased goodwill is the difference between the value paid for an enterprise as a going concern and the sum of its assets less the sum of its liabilities, each item of which has been separately identified and valued.
- Inherent: It is the value of the business in excess of the fair value of its separable net assets. It is referred to as internally generated goodwill and it arises over a period of time due to the good reputation of a business.
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