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Showing of salary recieved in balnce sheet

Waseem Syed (Advocate ) (272 Points)

29 December 2024

I have business income and i also have salary income, in which column of balance sheet salary income should be shown? plz guide

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Rama chary Rachakonda (Master in Accounts & Lawyer email ID:ramachary64@gmail.com voice no:9989324294) (5734 Points)
Replied 29 December 2024

Salary income should not be shown in the Balance Sheet. Instead, it should be reported in the Profit & Loss Account (or Income Statement).

Balance Sheet The Balance Sheet presents the financial position of a business at a specific point in time, typically including:

3. Equity (or Capital) Profit & Loss Account The Profit & Loss Account, on the other hand, presents the financial performance of a business over a specific period, typically including:

1. Revenues (or Incomes)

3. Profit or Loss Reporting Salary Income As salary income is a personal income, it should be reported in the Profit & Loss Account as:

1. "Other Income" or "Non-Business Income"

2. "Salary Income" (if you want to disclose it separately) Example Suppose your business has:

1. Business Income: ₹1,000,000

2. Salary Income: ₹500,000 In your Profit & Loss Account, you would report:

1. Business Income: ₹1,000,000

2. Other Income: ₹500,000 (or Salary Income: ₹500,000) Remember to consult with a chartered accountant or tax professional to ensure accurate reporting and compliance with accounting standards and tax laws.

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