Charges against Profits and Appropriation of Profits

The term "charges" has been used in Section . Items of expenses or losses that must be considered before profit is ascertained are called "charges against profit". 

After ascertaining profits, the question of their distribution arises. This is called "appropriation of profits". The prominent items of appropriation are provision [a misuse of this term in the context of "Reserves" (discussed above), but quite in vogue irrespective] for payment of dividends to shareholders and transfers to reserves. The section of the P & L A/c showing the appropriation is called P& L Appropriate A/c (again, the use of the words "and Loss" is well inappropriate), or just "Below the Line".