Question

6. What do you understand by profit or loss after incorporation​

Answer 1

Answer:

It is a capital profit and not legally available for distribution as dividend because a company cannot earn a profit before it comes into existence. Profit earned after incorporation is revenue profit, which is available for dividend.

Answer 2

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It is a capital profit and not legally available for distribution as dividend because a company cannot earn a profit before it comes into existence. Profit earned after incorporation is revenue profit, which is available for dividend.

More to know :–

In short, the profit earned after the date of purchase of business is called „Post-incorporation or Post-acquisition profit‟ and the profit earned before the date of purchase of business is termed as „Pre-incorporation profit‟.