Interview Q9 - I am a Layman. I am a proprietor. Tell me why Profit is treated at Liability side and Loss is treated at Asset side of Balance Sheet?

Saturday, August 23, 2008

Hint - Business and Owner are both different. Profit is liability of business towards owner thats why it comes at Liability Side and vice-versa for Loss.

Question 9A - Why Loss is treated at Asset side instead of deducting it from Owners Equity or say why it is carried forward?

Hint - Loss is right of a business to recover it from business-man but as per rules it is carried forward for deducting it from Business profit of the next year.

Recently this question was asked from a CA in the interview by a very big Indian FMCG company (name withheld).

0 comments:

ChartAcc Logo by Vikrmn CA Vikram Verma Vikrmn.com
CHARTACC
Share space for Chartered Accountants
and Financial Professionals

Novel by a Chartered Accountant

10 Alone

A novel by Vikrmn (CA Vikram Verma)

a saga of 10 friends.. 10 Dreams.. 10 hearts.. 10 Minds..

It's a story of 10 Chartered Accountants.. who celebrate personal and professional life.. all together.. Ten Together..

www.10Alone.com | www.Vikrmn.com