Profit is a Liability or asset?
Answers were Sorted based on User's Feedback
Answer / somya patnaik
no doubt about that profit is an liability bcoz if company
getting profit then definately he distribute between share
holder & keep something for reserve & surplus...
Is This Answer Correct ? | 5 Yes | 0 No |
Answer / vasu.a
profit is liability
profit is reserve and surplus
Is This Answer Correct ? | 5 Yes | 1 No |
Answer / imran pathan
Profit is a liability because it is earned with the use of
investment made by shareholders, in case of company is not
distributed profit it should be shown in the liability side
of the balance sheet.
Is This Answer Correct ? | 4 Yes | 0 No |
Answer / giri
By definition, Liability is something which
someone/somebody has some obligation to pay to someone.
From companies point of view, the profit earned by company
must be distributed among the shareholders at the time of
liquidation. So, It is certainly liability.
It cannot be treated as an asset because asset is something
which can give future cashflow or reduce the cashflow in
future and profit cannot do both of those.
Is This Answer Correct ? | 4 Yes | 0 No |
Answer / srinivas annavarapu
Business entity concept clearly indicates that the owner of
the company / business is different from the company /
business.
Based on the above concept profit is a liability to the
organisation/business as it is to be distributed amongst
the partners / share holders as it is earned against the
investments made by them.
Is This Answer Correct ? | 2 Yes | 0 No |
Answer / sandeep
profit is asset, liabilities and reserves and surplus b'oz
most of money are distributed among the owners some money
keep as reserves for contingency and future investment. if
companies are not distributing money toward owners and dept
holder then it is liabilities in b/sheet.
Is This Answer Correct ? | 2 Yes | 1 No |
Answer / ashok pathak
obesely profit is a libility bcoz. the net profit from p&l
a/c we add(+) in capital,
Is This Answer Correct ? | 1 Yes | 0 No |
Answer / harika
profit is liability as it belongs to shareholders
Is This Answer Correct ? | 1 Yes | 0 No |
Answer / suresh
profit is a liability why because asset means property
profit is not a asset to the organisation.
Is This Answer Correct ? | 1 Yes | 1 No |
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