Profit and Loss

Profit and Loss

          

What are profit and loss?

let us discuss it here.

Shopkeepers, traders, fruit-sellers, greengrocers, 

hawkers purchase goods and sell them to customers. 

Let us suppose that a shopkeeper purchased a bicycle for Rs 1200 and sold it to a customer for Rs 1300.

points to remember

* When we buy something we pay the cost of that thing.

* The price for which an article is purchased, is called the cost price or cost of the article.

Here, the cost price of the bicycle is Rs 1200

* The price for which an article is sold is called the selling price of the article.

Here, the selling price of the bicycle is Rs 1300.

points to remember

* If the selling price is more than the cost price, we say that the seller has made a profit.

* Profit is calculated by subtracting the cost price from the selling price.

∴ Profit = selling price – cost price

In the example above there was a profit of 1300 – 1200 = Rs 100.

* If the selling price is less than the cost price, we say that the seller incurred a loss.

* Loss is calculated by subtracting the selling price from the cost price.

∴ Loss = cost price – selling price