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Why we Add the net profit in the balance sheet ? Why we
shows profit in the liability side of the balance sheet?
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Answer / shikha
hii
We shown profit in the liablity side of balance sheet
because that profit has to be distributed among the
shareholder , owners of the company. We add profit with the
capital because capital is contributed by the owners and
owners shuold be very well aware of how much the net profit
the business have in a particular year.
| Is This Answer Correct ? | 0 Yes | 2 No |
Answer / ananth
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
| Is This Answer Correct ? | 2 Yes | 5 No |
If its is declared by auditor that business is not going concern that what journal entry will be pass?
Raj & Raj Ltd purchased a machinery on 01.01.1996 for Rs.88,000.The life of the machine estimated to be 5 Yrs.It was calculated that the old machinery would fetch Rs.8000 at the end of its useful life.it was decided to replace the machinery at the end of the 5th year by setting up depreciation fund and invest the annual depreciation (along with interest earned each year) in gilt edged securities carrying interest at 5% p.a. At the end of the 5th Year the securities were sold for Rs.9000.As per the sinking fund table Rs.14,478 is to be invested every year.A new machine was purchased on 01.01.2001 for Rs.1,00,000.pass the journal entries and show the ledger accounts
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