If net profit is a profit why does it appear on the
liability side of the balance sheet
Answers were Sorted based on User's Feedback
Answer / manoj singh negi (amrapali ins
It's appear on the liability side because it's the result
of capital investment of a company and capital is a
libiality for business (because of business entity
concept). whatever capital invested by owner he want some
return form it, thatwhy net profit become liability for
business, it is so because business have to pay this(net
profit) to the owner.
Is This Answer Correct ? | 40 Yes | 1 No |
Answer / moti
because capital is treated as liablities in accounts and
the treatment of net loss or profit is either substracted
or added in capital for knowing the increment of capital
or decrement of capital.
Is This Answer Correct ? | 5 Yes | 0 No |
Answer / megha arora
A bussiness/organisation/company is not a natural entity.
It runs on the capital provided by its
members/owners/shareholders etc.So whatever is the profit
is actuaaly of these persons.So its a liability.
Is This Answer Correct ? | 5 Yes | 0 No |
Answer / prasanta
Profit is regarded as the lifeblood of the company and also
for the existence of business profit is the integral
part,so whenever a business man investing money into the
business he is always expecting returns for running his
business smoothly .As both owner and business both are
separate from each other that capital investment as well as
return from this became the liability of the business.
Is This Answer Correct ? | 4 Yes | 0 No |
what is the meaning of fbt? tell me diffrent type of fbt rate? & when it will consider in accounting?
Expand--------ACRD
sale tax which place effected
Received cheque Rs 250000 which is exclusive of 5% Security deposit 2.24% income tax and i% miscellaneous recovery. Pass necessary entry
What is Balance sheet? How to know the financial position of the company in balance shhet?
Short Answer on _________Revenue Expenditure
Contra entry with example?
40 Answers Industrial Power Supplies, PVS Advertising,
what is tds rate 2009-10 for 1.contractors 2.commission 3.advertisement
Short Answer on____________Analysing
how to prepare ourselvs and what to know about accounts for interview level and how to give a self introduction
Expand G O I
About Funding Working Capital to a Company? A company Turn over is 12 Cr, but in the bank statement credits per month is more that 3 Cr? how this could happen? awaiting your views?