Arrange the following items in Correct order as per the Statement of Profit and Loss of a Company.
(A) Employee Benefit Expenses
(B) Finance Costs
(C) Depreciation and Amortisation
(D) Purchase of Stock in Trade
(E) Exceptional Items
Choose the correct answer from the options given below :
Answer & explanation
Correct answer: option 3
The correct answer is Option (3) - (D), (A), (B), (C), (E).
THIS IS THE VERTICAL FORMAT OF STATEMENT OF PROFIT AND LOSS
I Revenue from operations
II Other income
III Total Revenue (I+II)
IV Expenses: Cost of materials consumed
Purchases of stock-in-trade
Changes in inventories of finished goods Work-in-progress and stock-in-trade
Employee benefits expense
Finance costs
Depreciation and amortisation expense
Other expenses
Total expenses
V Profit before extraordinary items and tax (III-IV)
VI Exceptional items
VII Profit before extraordinary items and tax (V-VI)
VIII Extraordinary items
IX Profit before tax (VII-VIII)
Thus from the above format we can see that the correct sequence expenses is (D), (A), (B), (C), (E).