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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 Posted / monty
hi feriend
profit should be shown in liability side why because-
whenever the company makes profit in a particular year, 1st
it have to distribute that profit among the share holders
(eqity+preference) and also it should be distributed to the
debenture holders in the form of Interest. according to
business antity concept of accointing.
| Is This Answer Correct ? | 13 Yes | 3 No |
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