23 March 2009
(A) Cash is liquid assets. It is differnece between receipt and disbursement of any cash transaction. eg. rent paid in cash of rs 10000/-p.m. Profit is combine effect of real and nominal accounting transaction related to expenses and income of mercantile business.
(B) Net profit comes after crediting all income and deducting debit expenses from them. This profit is wealth of business for the perticular year. Wealth has credit for the business therefore netprofit adds or comes under capital account.
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