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Profit transfer to proprietor's capital a/c

Tushar (Service) (159 Points)

28 November 2011

If there is profit or loss during a financial year than how do we transfer such profit/loss to the capital of proprietor's a/c? It should be posted on which date?

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Devendra (Chartered Accountant) (4775 Points)
Replied 28 November 2011

The Profit / Loss during the Financial Year should be transferred to the Capital A/c of the Propreitor on the Last day of the Financial Year (ie. on 31/03/2011).

Following Entry to be passed:-

In case of Profit

Profit & Loss A/c Dr. XX

To Proprietor's Capital A/c XX

(being Profit Transferred)

In case of Loss

Proprietor's Capital A/c Dr. XX

To Profit & Loss A/c XX

(Being Loss transferred to Capital A/c)

Regards,

Devendra Kulkani