Question

In a company’s balance sheet, the debit balance of the statement of profit & loss is shown under ______.

Options

• Non-current Liabilities.

• Current Liabilities.

• Non-current Assets.

• Reserves and Surplus.

Answer 1

In a company’s balance sheet, the debit balance of the statement of profit & loss is shown under Reserves and Surplus.

Explanation:

A debit balance in the Statement of Profit & Loss represents an accumulated net loss for the company. Under Schedule III of the Companies Act, corporate losses are not shown as separate items on the assets side. Instead, this loss is disclosed directly inside the Reserves and Surplus section as a negative (minus) figure under the sub-head “Surplus”. It reduces the overall total of the company’s internal reserves.