Question

net profit is computed in the ______
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Answer 1

Answer:

Net profit is computed in the Income statement or profit & loss A/c.

Explanation:

The net result of income statement or profit and loss account is net profit or loss.

Net profit is difference between Gross profit plus other income and sum of all other indirect expenses.

Net profit signifies that the business proceeds are over and above the efforts incorporated by the entity.

Higher the net profit, higher is the growth of reserves & surplus. Higher the surplus indicates increase the net wealth of the entity by rise in value of equity.