difference between charge against profit and charge on profits?????

There is no difference between Charge against Profits and Charge on Profits. In fact both are same. However, there is a difference between Charge against Profit and Appropriation of Profits. The difference between the two is given below.

Basis of Difference

Charge against/on Profits

Appropriation of Profits


This implies deduction of expenses from the profits in order to compute net profit/net loss during the accounting year.

This implies distribution of available net profits left out after providing all expenses.


It is a compulsory or mandatory obligation that a firm has to bear.

It is not compulsory in nature.


It is provided under all circumstances- irrespective of profits or losses.

It is provided only in case a firm has profits (and not in case of losses).

Relevant Accounts

It is recorded (debited to) the Profit and Loss Account.

It is recorded (debited to) the Profit and Loss Appropriation Account.


It affects net profit.

It does not net profit.

Accounting Order

It is done before all appropriations of items.

It is done after all charges of items.

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