What marks the beginning of a profit and loss account?

The beginning of a profit and loss account is marked by the total sales (revenue) generated. This figure is foundational as it represents the income a business earns from its core operations before any expenses are deducted. The profit and loss account, also known as the income statement, is structured to show how much money a company brings in during a particular period (total sales) and how this amount is affected by expenses and costs incurred during that same period.

By establishing total sales first, the profit and loss account allows for a clear view of operational performance. It leads into deductions for costs and expenses, ultimately allowing the calculation of net profit. Understanding this flow is crucial for interpreting a company's financial health, as it highlights the relationship between revenue generation and profitability.