becuase it is a liablity share holoder or proprietor is 
owner of company that why it pay to them only

because it is a liability share holder or proprietor is 
owner of company that why it pay to them only

hi anshu, 
         no ya..that is a prfoit to the company...Then why 
it is liablty....

i want some more clearnce please......

Thank u,
Venu

Dear Mr. Venu

Profit of the company is a liabilility because this profit
need to be distributed to the partnes or share holders or
to the porpritor, which is not yet done

when we prepare final accounts we just arrive at the proft 
figure and not the actual distribution of the profit.

Thanks

the profit has to shown in the balance sheet asset side 
only because it is the liability to the company andit has 
to be yet distribute to the share holders if teh company 
requires the finacial asistance then it may plough back its 
profit to the business that's why we have to enter the 
profit in the liability side of the balance sheet only

hi feriend

profit should be shown in liability side why because- 
whenever the company makes profit in a particular year, 1st 
it have to distribute that profit among the share holders
(eqity+preference) and also it should be distributed to the 
debenture holders in the form of Interest. according to 
business antity concept of accointing.

Because owner or propriter of a company make all prepaid 
expense to comtinue companies affairs..

when it profit obiasily it should be addjest is capital 
account or visa-virsa.

it is not a particular theory.. but an example..

HEMS......