pravin1984

 Profile Answers by pravin1984 

• Mar 2nd, 2009

 

Net profit is shown in Liability side because of Net profit is liability to owner/shareholder.

niki_1079

 Profile Answers by niki_1079 

• Jan 1st, 2010

 

Net Profit is the amount earned by the Owner and it is always added to the Capital. As Capital is liabilty of the firm/Co. therefore it is shown on the liability side of the balance sheet.

Meenu sharma

• Nov 4th, 2014

 

liabilities

AKASH PANDA

• Dec 5th, 2014

 

as we know net profit is added with capital and capital is treated liability side of the balance sheet so that it treated as liability side of the balance sheet .

gangadhar

• Dec 29th, 2014

 

Net profit is a profit of the compnany but the amount earn by the capital so it has to be pay the shareholders so it is treated as liability.

prajwalprasanna

• Mar 2nd, 2015

 

as per accounting concepts and conventions there is a concept in accounting called BUSINESS ENTITY CONCEPT which says business is separate from proprietor so when the proprietor contributes money to business it means business is borrowing money from outsider so it is liability to business so when the capital is liability even the profit earned is liability and repayable to the owner so is treated as liability as per accounting

Naveen

• May 11th, 2017

 

Assume that I started a business with a capital 4000..... i made no transaction.. if I prepare a balance sheet for it how it will be balanced now?

rahul patidar

• Oct 1st, 2021

 

If you not made any type of transaction it mean you have not earned any type of profit.So that not need to shown in balancesheet.

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UMMAR ISLAM TANTARY

• Nov 21st, 2021

 

Because Profit is liability of the business for its
propriters or share holders