Adjustment of net profit
Waseem Syed (271 Points)
12 October 2018
if my net profit is greater than my assets , then how can adjusted my net profit in balance sheet??
8 Replies
rama krishnan
(12239 Points)
Replied 13 October 2018
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
RAJA P M
("Do the Right Thing...!!!")
(128091 Points)
Replied 13 October 2018
@ 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...
Rohan Bagra
(406 Points)
Replied 14 October 2018
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
Moosa Tamijuddin
(Finance and Project Controller)
(115 Points)
Replied 14 October 2018
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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