Answer Posted / anudeep
hi
we know the first concept of accounting is entity concept
as per that concept owner is distinct from business
thats why in sole proprietaryship profit is added to capital
and loss is deducted from capital
like in companies and partnership also
loss can be deducted from capital or shown as asset in asset
side of the balance sheet
in case of companies loss can be duducted from reserves or
shown as asset
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