| Profit and Loss account | Statement of Profit (Or) Loss |
|---|---|
| Gross Profit and Net profit can be found out | Only Net profit can be found out. |
| The performance of the business can be measured. | The performance of the business cannot be measured properly |
| It helps the users in taking important decisions. | The users cannot rely this system because the profit is ascertained from incomplete records. |
| It helps to ascertain the income from the business and income from other sources | No such allocation is possible under this system. |