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Question
When Profit and loss account shows the losses. It is shown under which side of balance sheet?
Options
Assets
Liabilities
Can't say
None of these
MCQ
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Solution
Assets
Explanation:
When the Profit and Loss account shows a debit balance, i.e., a loss that cannot be offset by general reserves, the same is reported as the last item on the asset side.
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Preparation of Simple Financial Statements of a Company
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