According to which concept accumulated profit is shown in liability side of balance sheet
Answers
Explanation:
As per accounting concepts and conventions there is a concept in accounting called BUSINESS ENTITY CONCEPT which says business is separate from proprietor so when the proprietor contributes money to business it means business is borrowing money from outsider so it is liability to business so when the capital is liability even the profit earned is liability and repayable to the owner so is treated as liability as per accounting
Answer:
Explanation:
the profit or net income belongs to the owner of a sole proprietorship or to the stockholders of a corporation. The owner's or stockholders' equity is reported on the credit side of the balance sheet. Recall that the balance sheet reflects the accounting equation, Assets = Liabilities + Owner's Equity.