Migrated to http://wavelet.asia/customer-portal/2011/06/28/generating-profit-and-loss-statement/  
 

Net sales, cost of goods sold, and gross profit are key elements of profitability. Therefore, some accounting rules have to be explained.

 1) Cost of goods sold
     Beginning inventory + Net purchase + Freight in = Cost of good available for sale - Ending inventory = Cost of Good Sold ( COGS)

 2) Net Purchase
     Purchase of inventory - Purchase discount - Purchase return = Net purchase

 3) Net Sale
     Sale revenue - Sale discount - Sale return = Net sale
 
 4)  Gross Profit
     Net sales - Cost of goods sold = Gross Profit

 5) Net Profit (LOSS)
  Gross profit -  Expenses (operating expenses) = Net Profit (LOSS)
 
 


  1) Black box shows " Net Sales" in ELIZATEE branch
  2) Red box shows Gross Profit ( GP ) = Net sales - Cost of goods sold
  3) Green box shows Total Operating Income = Gross Profit -Total Operating Expenses
  4) Yellow box shows Net Profit    
         
   To produce Profit and Loss statement please refer to P&L Statement or how to produce a monthly profit and loss statement?