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bigduckontax
bigduckontax, Accountant
Category: Tax
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Experience:  FCCA FCMA CGMA ACIS
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Is my Gross profit from my balance sheet always meant to exactly

Customer Question

Is my Gross profit from my balance sheet always meant to exactly equal my total liabilities from my P&L?
Submitted: 3 years ago.
Category: Tax
Expert:  bigduckontax replied 3 years ago.
Hello, I'm Keith and happy to help you with your question.

Er, no! The balance sheet tots up all assets, deducts all liabilities and leaves a balance which is usually, but not always, equal to the balance on the Profit and loss account. This is because there may be other reserves in the equation outwith normal trading eg a revaluation reserve created by a revaluation of, usually, landed property. I think you may be getting confused with your definition of a liability.
Customer: replied 3 years ago.

I've simple accounts, but I have a difference which is equal to the previous years net profit exactly. So I must have not included this somewhere by mistake, as it would match otherwise.

Expert:  bigduckontax replied 3 years ago.
So, you have now solved your own problem; congratulations.
bigduckontax and 2 other Tax Specialists are ready to help you
Expert:  bigduckontax replied 3 years ago.
Thank you for your support.

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