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In this Illustration is the Business Purchase A/C made wrong as the profit is shown on credit side.
Answers (14)
Thread Starter
Harsh MittalIn another Illustration Business Purchase A/C has Assets on the credit side and Liabilities on the debit side.
Can you share the question for this?
Thread Starter
Harsh MittalAnd how Profit and Loss A/C is debited and it is given as profit.
Profit increases net asset. If you see it is the difference between net assets on 31st March and 31st Dec.
CA Suraj Lakhotia Admin
Profit increases net asset. If you see it is the difference between net assets on 31st March and 31st Dec.
In this Illustration Business Purchase A/C has Assets on the credit side and Liabilities on debit side.
Thread Starter
Harsh MittalIn this Illustration Business Purchase A/C has Assets on the credit side and Liabilities on debit side.
When you incorporate asset Dr. Asset Cr Business Purcahse account.
CA Suraj Lakhotia Admin
When you incorporate asset Dr. Asset Cr Business Purcahse account.
Sir in Illustration 2 Assets should appear on Credit Side in Business Purchase A/C or are they appearing in Debit Side because they are being cancelled.
Thread Starter
Harsh MittalSir in Illustration 2 Assets should appear on Credit Side in Business Purchase A/C or are they appearing in Debit Side because they are being cancelled.
Can you share the illustration you are referring to?
CA Suraj Lakhotia Admin
Can you share the illustration you are referring to?
In this Illustration Assets are on Debit Side of Business Purchase A/C and only Goodwill is on the Credit Side of Business Purchase A/C
Sir you told that Assets will be Debited and Business Purchase A/C will be Credited but in this Illustration Assets are appearing on the Debit side of the Business Purchase A/C and only Goodwill is appearing on the Credit Side on the Business Purchase A/C
Thread Starter
Harsh MittalSir you told that Assets will be Debited and Business Purchase A/C will be Credited but in this Illustration Assets are appearing on the Debit side of the Business Purchase A/C and only Goodwill is appearing on the Credit Side on the Business Purchase A/C
Use this instead of business purchase account.
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