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Why profit is a liability and loss is an assets
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Answer Posted / prasad shirke
profit is a indirect income of a capital. when we start
business,we invest our capitl for earning profit,hence at
the end of the year we add profit in capital account.
Liabilities means dues, profit is the dues of the Capital.
if Capital received Profit he invest part of this profit in
business for increse his business,hence Profit is a
liability.
Loss is oposit of Profit,we also deducted loss from
Capital.but as per presentation point of view we take a
Loss on Assets side (thhi is my point of view)
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