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Adjustment of net profit
if my net profit is greater than my assets , then how can adjusted my net profit in balance sheet??
Replies (8)
how it's possible?
isn ' t it be possibble??
ya it's not possible.
ok..thank you for valuable guidance
net profit will be added to your capital account and to the extent same will be reflected as either cash in hand or cash at bank
@ Mr Waseem.,
If Your Business Transactions is Accounted Correctly then It's balanced As per Mr Rama Krishnan's view...
Check Out Your Transactions and It's balances in Asset Side and Liabilities Side...
If Your Business Transactions is Accounted Correctly then It's balanced As per Mr Rama Krishnan's view...
Check Out Your Transactions and It's balances in Asset Side and Liabilities Side...
net profit of an entity cannot be more than the value of assets of that entity.
in a case where profit is too high even than it is not possible.
you should check whether your accounts are properly accounted or not .
as per my opinion there will be cash/bank or debtors amounts which are not properly accounted.
so please check the above points in your books of accounts.
for further query contact me on my email
jkrohan9788 @ gmail.com
Mr.Waseem, sorry for going to the basics of accounting:
TOTAL ASSETS - TOTAL LIABILITIES = Gross Profit
GROSS PROFIT - EXPENSES = Net Profit.
If this be the case, how could the Net Profit arrived will be greater than the Net Assets?
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