If net profit is a profit why does it appear on the
liability side of the balance sheet
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Answer Posted / manoj singh negi (amrapali ins
It's appear on the liability side because it's the result
of capital investment of a company and capital is a
libiality for business (because of business entity
concept). whatever capital invested by owner he want some
return form it, thatwhy net profit become liability for
business, it is so because business have to pay this(net
profit) to the owner.
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