Why loss shown in as Assets in Balance Sheet?
Answers were Sorted based on User's Feedback
AS per Business entity assumption owner and his business are consider to be two different persons.
Asset means anything which will do favour to the business in future. in the same manner liability means anything which will do unfavour to the business in future.
If the business is in the position of Loss means it is the duty of the owner to compensate it. it will do favour to the business in future so Loss is shown under the asset side of the balance sheet.
if the business is in the position of profit means it is the duty of the company to give the return on capital. it will do unfavour to the company so profit is shown under the liability side of the balance sheet.
Is This Answer Correct ? | 10 Yes | 0 No |
Answer / megha
Since it is a debit balance of P&L a/c it is shown in assets side.It is a type of fictitious asset. These are assets not represented by tangible possession or property.Example of fictitious assets are preliminary expenses,discount on issue of shares,debit balance in the profit&loss a/c shown on the assets side in the balance sheet.
Is This Answer Correct ? | 5 Yes | 4 No |
Answer / p. fayaz ahamad
profit or loss it should be transferred to the liabilities side of the balance sheet and it is deducted from the capital as less net loss
Is This Answer Correct ? | 1 Yes | 2 No |
what is budgeting and steps required to configure this.
1 Answers Meru Cabs, Virtual Studio,
what is the examples of direct income
How to prepare HSD statements in tally
Prepaid insurance entry
sir if we make purchase and sale for the same pary for the same amount what adjusting entry have to be passed to close that entry in tally. while taking bill wise details we can see the dr. cr.and have to cancell that
how do we pass the Entry for Reserves? and What is the Meaning of Surplus?
if my salary is 12000 per month how much i will get after deducting PF an ESI
SIR HOW MANY FORM USE FOR COMMERCIAL TAX & WHAT IS THEIR USES. PLEASE GIVE YOUR SUGGEST
What do you mean by AS in accounts?
How is the accounting for hire purchase transactions done?
golden rules of accounting
Why intercompany reconciliation