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Why net profit transfer to liablity side ?

Answer Posted / sandep negi

A Simple thought is " Money earns money". The capital which
is used in business net profit is that interest. Captital
A/c always bears Liability side.While making final account,
net profit is transferred to Capital. thats why net profit
is transferd to liability side

Is This Answer Correct ?    3 Yes 1 No



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