why net profit shown liabilities side in balance sheet
- 9 Answers
- 34258 Views
- DuPont, FactSet Systems, I also Faced
- E-Mail Answers
Answers were Sorted based on User's Feedback
Answer / h.r. sreepada bhagi
As per 'Business Entity Concept', Assets minus external
liabilities is called Networth & it includes Capital,
Reserves & Surplus & Carried Forward balance of Profit. This
networth is the company's liability towards the
shareholders. In horizontal Balance Sheet it's shown on the
liabilities side & in vertical Balance Sheet it's shown
under Sources of Funds.
| Is This Answer Correct ? | 55 Yes | 8 No |
Answer / nishant kumar
Because Profit is liability of the business for its
propriters or share holders.
| Is This Answer Correct ? | 37 Yes | 3 No |
Company is an artificial human created by Owner. Company has
to pay this net profit to Owner or Equity share holders. So
it will be shown in balance sheet liabilities side.
Capital A/c XXXXX
+Net profit xxxx
-------
XXXXXX
--------
As per owner or Equity share holder it's an income.
| Is This Answer Correct ? | 24 Yes | 4 No |
Answer / bejjenki naveen
according to accounting terms that whenever you get net profit you transfer that to liability side,because you have to pay this(net profit) to your owner or shareholders...,Thus we always consider that net profit is liability of the company...,
| Is This Answer Correct ? | 17 Yes | 4 No |
Answer / ravindranath
share capital and reserves belongs to shareholders.company has to pay return on its capital to shareholder after meeting all the requirements.so it is belong to shareholder.so company is liable to its shareholder.so it becomes liability to the company
| Is This Answer Correct ? | 8 Yes | 0 No |
Answer / vimal mishra
Liablities includes in Capital,Reserves & Surplus & Carried Forward balance of Profit.
| Is This Answer Correct ? | 7 Yes | 7 No |
Answer / wangda.tenzin
net profit is liability of the business because it is reward
for the owner for their capital investment
| Is This Answer Correct ? | 1 Yes | 1 No |
Liablities includes in Capital,Reserves & Surplus & Carried
Forward balance of Profit
| Is This Answer Correct ? | 3 Yes | 7 No |
If A Company pays amount thru bank for a supplier deducting tds on behalf of B company. Accounting entries to be made in company A and B
why the company select you?
Salaries and wages per general ledger is 288,000 of which 56,500 is paid in advance. Req: Prepare adjusting journal entries from the books of audrey company as of dec 31 09. (pls help me with this, I'm a bit slow but willing to learn, thanks!)
What are the columns of a journal?
What is CRR ? How it Works?
1, How enter Accumulated Deprication Journal Entry, (Land& Building Value 500000 AED, How to pass entry?
What is a Accounts Payable & Accounts Receivable..?
How new/innavtive assets are to be treated under IFRS?
I want to know service tax applicable on Packers & Movers yes or no
WHAT IS MEANING OF PROVISION
What is meaning of Corporate Assessee & Non Corporate Assessee? Corporate Market & Non Corporate Market?
9 Answers Chartered Accountant, IBM, Tally Solutions,
15 methods of depreciation and its examples
Audit 
