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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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Discount earned is transferred to credit side of ___________ account
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| Particulars | ₹ | Particulars | ₹ |
| Gross profit | 50,000 | Interest received | 2,000 |
| Office rent | 10,000 | Discount received | 3,000 |
| Depreciation on office assets | 8,000 | Carriage outwards | 2,500 |
| Discount allowed | 12,000 | Insurance on office building | 3,500 |
| Advertisement | 4,000 | General expenses | 3,000 |
| Audit fees | 1,000 | Freight inwards | 1,000 |
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Net profit/loss is transferred from ______.
Storage expenses, carriage outwards, salaries of sales staff are recorded on the ______ side of the ______.
What principle is followed by recording indirect expenses and incomes in the Profit and Loss Account?
