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what is difference between cash and profit?, and why
netprofit comes under capital account?
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Answer Posted / vaibhavi
(A) Cash is liquid assets. It is differnece between receipt
and disbursement of any cash transaction. eg. rent paid in
cash of rs 10000/-p.m. Profit is combine effect of real and
nominal accounting transaction related to expenses and
income of mercantile business.
(B) Net profit comes after crediting all income and
deducting debit expenses from them. This profit is wealth
of business for the perticular year. Wealth has credit for
the business therefore netprofit adds or comes under
capital account.
| Is This Answer Correct ? | 17 Yes | 5 No |
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