Follow Our FB Page << CircleMedia.in >> for Daily Laughter. We Post Funny, Viral, Comedy Videos, Memes, Vines...


why net profit shown liabilities side in balance sheet

Answers were Sorted based on User's Feedback



why net profit shown liabilities side in balance sheet..

Answer / h.r. sreepada bhagi

As per 'Business Entity Concept', Assets minus external
liabilities is called Networth & it includes Capital,
Reserves & Surplus & Carried Forward balance of Profit. This
networth is the company's liability towards the
shareholders. In horizontal Balance Sheet it's shown on the
liabilities side & in vertical Balance Sheet it's shown
under Sources of Funds.

Is This Answer Correct ?    55 Yes 8 No

why net profit shown liabilities side in balance sheet..

Answer / nishant kumar

Because Profit is liability of the business for its
propriters or share holders.

Is This Answer Correct ?    37 Yes 3 No

why net profit shown liabilities side in balance sheet..

Answer / nani

Company is an artificial human created by Owner. Company has
to pay this net profit to Owner or Equity share holders. So
it will be shown in balance sheet liabilities side.

Capital A/c XXXXX
+Net profit xxxx
-------
XXXXXX
--------
As per owner or Equity share holder it's an income.

Is This Answer Correct ?    24 Yes 4 No

why net profit shown liabilities side in balance sheet..

Answer / rajiv sharma

Credit all incomes & gains

Is This Answer Correct ?    30 Yes 16 No

why net profit shown liabilities side in balance sheet..

Answer / bejjenki naveen

according to accounting terms that whenever you get net profit you transfer that to liability side,because you have to pay this(net profit) to your owner or shareholders...,Thus we always consider that net profit is liability of the company...,

Is This Answer Correct ?    17 Yes 4 No

why net profit shown liabilities side in balance sheet..

Answer / ravindranath

share capital and reserves belongs to shareholders.company has to pay return on its capital to shareholder after meeting all the requirements.so it is belong to shareholder.so company is liable to its shareholder.so it becomes liability to the company

Is This Answer Correct ?    8 Yes 0 No

why net profit shown liabilities side in balance sheet..

Answer / vimal mishra

Liablities includes in Capital,Reserves & Surplus & Carried Forward balance of Profit.

Is This Answer Correct ?    7 Yes 7 No

why net profit shown liabilities side in balance sheet..

Answer / wangda.tenzin

net profit is liability of the business because it is reward
for the owner for their capital investment

Is This Answer Correct ?    1 Yes 1 No

why net profit shown liabilities side in balance sheet..

Answer / d.p.prabhudas

Liablities includes in Capital,Reserves & Surplus & Carried
Forward balance of Profit

Is This Answer Correct ?    3 Yes 7 No

Post New Answer



More Accounting General Interview Questions

What is cost accountancy? What are the objects of cost accountancy?

0 Answers  


WHAT IS SHARE OPTION OUTSTANDING ACCOUNT??

1 Answers   National Institute of Food Technology Entrepreneurship and Management NIFTEM,


What is Tax Audit ? Please Explain.

1 Answers  


Please expain difference of service tax and entry tax and rates also in fy 2010-11 and how calculate these taxes

2 Answers  


salaries due for the month of march will be recorded in

5 Answers  






What is departmental accounting? Give an example

0 Answers  


What software applications have your used for accounts receivable?

0 Answers  


What are the method of accounting?

7 Answers   Capital IQ,


Tell me what are the key tasks for account executive?

0 Answers  


What is difference between debit note and Proforma Invoice

3 Answers   ICA,


Paid Transportation Which type of expenses these expenses

2 Answers  


What is the difference between Finance and Accounts?

1 Answers   Cap Gemini,






Categories