because profit is earned on the capital invested which is not the company's money.
capital is also like a liability and the profit should actually be given to the owner and the money is still there with the company so it is again a liab. for the company to pay the profit which is a return on the capital invested by the owner.
Net profit appears on liabilities of balance sheet . Net profit is added to capital.
unearned rental income is disclosed under which part? asset or liability?
Profit and Loss.
profit or loss for the period
The relationship between the accounting equation and the balance sheet is the NET PROFIT. ( I THINK :/ )
Net profit appears on liabilities of balance sheet . Net profit is added to capital.
Balance Sheet & Statement of Cash flows
balance sheet and cash flow statement
balance sheet and statement of cash flow
The main parts of a balance sheet are profit, loss and inventory.
the letter of credit is not shown in the balance sheet, since it's a contingent commitment but it should be disclosed in a separate note
reserves surplus
To determine profit in a balance sheet, you would need to look at the income statement. The income statement shows revenues and expenses for a specific period, such as a year. At the end of the period, the net income (profit) is transferred to the balance sheet as retained earnings. The retained earnings section of the balance sheet will show the accumulated profit over time.
With non-profit organisations, when the balance sheet doesn't show a loss, but what would be classified a profit for profit organisations, it is called a surplus. When it is what would be considered a loss for profit organisations, it is called a deficit.
unearned rental income is disclosed under which part? asset or liability?
Amount of merchandise inventory is disclosed at the bottom of the financial statement under balance sheet.
Balance sheet is the summary of Assets ,Liabalities , and profit or loss from Profit and loss account. following are the common reasons 1.As Purely based on nduble entry system For each ledger debits there should a equlent ledger credit on all transactions. 2. We can divide ledgers into Balance sheet items and Profil and loss account items. Balance sheet ledgers are ledger balances which directly reflects in Balance sheet Profit and Loss ledgers are ledgers which is reflecting only in Profit and loss account not in balance sheet. 3. Check the opening balance sheet, difference in opening balance sheet may the reason.