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Question
In case, the total of the debit side is greater than the total of the credit side, the difference represents ______.
Options
Net profit
Net loss
Gross profit
Gross loss
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Solution
In case, the total of the debit side is greater than the total of the credit side, the difference represents Net loss.
Explanation:
In the world of accounting, Profit and Loss accounts have a debit balance when the debit side exceeds the credit side such a balance is called Net loss.
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RELATED QUESTIONS
Give a word, term, or phrase which can substitute the following statement:
An amount spent on promoting sale of goods.
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Name any two direct expenses and indirect expenses.
Correct and Rewrite the following statement:
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To Profit and Loss Account
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Prepare Profit and Loss Account of Sanjay Brothers for the year ended 31st March, 2018 from the following balances.
| 1) | Bank charges | ₹ 22,000 |
| 2) | Interest (Cr.) | ₹ 16,000 |
| 3) | Sundry expenses | ₹ 42,000 |
| 4) | Insurance | ₹ 35,000 |
| 5) | Salaries | ₹ 40,000 |
| 6) | Rates and Taxes | ₹ 13,000 |
| 7) | Postage | ₹ 8,000 |
| 8) | Advertisement | ₹ 40,000 |
| 9) | Rent paid | ₹ 32,000 |
| 10) | Bad debts | ₹ 10,000 |
| 11) | Commission | ₹ 17,500 |
| 12) | Printing & Stationery | ₹ 21,000 |
| 13) | Loss by fire | ₹ 18,000 |
| 14) | Discount (Dr) | ₹ 23,000 |
| 15) | Discount (Cr) | ₹ 37,000 |
| 16) | Misc. Income | ₹ 14,000 |
| 17) | Depreciation | ₹ 34,000 |
| 18) | Carriage Outwards | ₹ 60,000 |
| 19) | Godown Expenses | ₹ 40,000 |
| Note: Gross Profit | ₹ 4,07,500 | |
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Account prepared to know Net Profit or Net Loss.
Give a word, term or phrase which can substitute the following statement:
Account prepared to know Net Profit or Net Loss.
______ provides information about the net profit earned or net loss suffered by the business during a given accounting period.
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Give a word, term or phrase which can substitute the following statement:
Account prepared to know Net Profit or Net Loss.
