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bigduckontax, Accountant
Category: Tax
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Is my Gross profit from my balance sheet always meant to exactly

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Is my Gross profit from my balance sheet always meant to exactly equal my total liabilities from my P&L?
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 4 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.

So, you have now solved your own problem; congratulations.
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