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How can the business show a profit and yet be overdrawn at the bank?
A business' profit is absolutely unrelated to its bank balance.
Why does the owner of a business calculate profit?
to reconcile the cash book balance with the balance on the bank statement
How will withdrawing cash from my savings affect my profit rate?
bank profits rates can get affected with continuous withdrawals. Higher the balance more will be the profit earned.
If a company has overdrawn its bank balance then?
The amount of the debits must equal the amounts of credits
Is that bank overdraft expense?
Yes, bank overdraft is an expense and is shown in debit side of the Profit & Loss A/c. It's also a liability and is shown in 'Liabilities' of the Balance Sheet of an individual or a company.
How can the business show a profit and yet be overdrawn at the bank?
A business' profit is absolutely unrelated to its bank balance.
Where does overdraft go to balance sheet or profit and loss account?
Bank overdraft is shown in balance sheet either as a negative amount of bank in asset side or at liability side of balance sheet.
Why does the owner of a business calculate profit?
to reconcile the cash book balance with the balance on the bank statement
Annual report of silk bank 2005?
i need balance sheet and profit loss statement of silk bank 2005
How do income statements and balance sheets articulate?
The income statement is part of the "Profit and Loss" ("P&L") statement. Here you state what is accounts receivable and what is paid, and end up with a profit or a loss. Now that is taken on to the balance, to make a profit is an asset, while a loss is a liability that has to be covered. So, in the balance, the profit appears as an increased bank deposit, or that you have increased inventory and bought cars and other things for the profit - or paid off debt. Now if you have made a loss, your debt should be increased, and your bank deposit decreased or you may have sold off inventory to pay off. This is seen in the balance. Taking the entire profit and use it to pay debt will decrease the balance, which bluntly does not look good. Here a good accountant makes a difference, place the profit to impress the bank and shareholders, articulate that you are doing fine by "pruning" the balance according to GAP rules that also makes the bank smile.
Why there is bank overdraft even though business making profit?
overdraft is included in balance sheet not in income statement which calculates gross and net profit
How will withdrawing cash from my savings affect my profit rate?
bank profits rates can get affected with continuous withdrawals. Higher the balance more will be the profit earned.
If a company has overdrawn its bank balance then?
The amount of the debits must equal the amounts of credits
How is profit calculated from trial balance and bank statements?
Put simply, profit = bank balance + income - expenditure. Take a cake shop as an example. An accountant would note the opening balance of the shop's bank account at the start of the financial year. He would then add to that all the money taken in the shop over the year from selling cakes etc. Then he would deduct things like the cost of buying the cakes from the supplier, the running costs of the shop (electricity etc) and staff wages. Whatever figure is left after all the expenses have been deducted - is profit.
Where does bank go in a trading profit and loss account or balance sheet?
Well salaries payable is liability of an organization . This is a current liabilities so they are posted in capital and liability side of a balance sheet.
Is that bank overdraft expense?
Yes, bank overdraft is an expense and is shown in debit side of the Profit & Loss A/c. It's also a liability and is shown in 'Liabilities' of the Balance Sheet of an individual or a company.
What do you mean by credit balance in profit and loss Ac?
credit balance in profit and loss a/c is loss
