Question

A) write a short note on : (i) unrealized profit (ii) capital profit

Answer 1

1) Unrealized profit:: An unrealized gain is a potential profit that exists on paper, resulting from an investment. It is an increase in the value of an asset that has yet to be sold for cash, such as a stock position that has increased in value but still remains open. A gain becomes realized once the position is sold for a profit.

2) Capital profit::Profit Arisen from Non-recurring transactions is called capital profit. capital profit should be transferred to Capital Reserve account. Which appears on the liabilities side of the balance sheet.

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