DIFFERENCE BETWEEN PROFIT & LOSS ACCOUNT AND BALANCE SHEET :

Profit & Loss Account	Balance sheet
1. Profit and loss account is an account	1. Balance sheet is a statement of assets and liabilities.
2. Profit and loss account shows the profits earned or losses incurred for the accounting period	2. Balance sheet shows financial position of the business.
3. Profit and loss account is prepared for the accounting period	3. Balance sheet is prepared as at the last day of the accounting period.
4. The accounts that are transferred to the profit and loss account are closed and cease to exist.	4. The accounts which are shown in the balance sheet do not lose their identity and become the opening balances in the next accounting period