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Why we Add the net profit in the balance sheet ? Why we
shows profit in the liability side of the balance sheet?
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Answer Posted / samir manchekar
business & owner are different things as per seperate entity concept.
when owner brings capital to the business then it is liability for the business so it is shown in the balance sheet at the liability side busines has to give something return for their for their capital and the net profit is profit for the owner but it is liability for the company thats y its added to the capital
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