difference between in the formula of net divisible profit and divisible profit reply fast please its urgent
Dear student
divisible profits is a profit which is available for dividend to shareholders .after creating the provisions, reserves and funds out of business profits.
net divisible profit implies the amount which is left after adjusting items such as interest on capital, interest on drawings, salary, commission etc. it is the balancing fifure on the debit side of the profit and loss appropriation account. this profit is distributed among the partners and hence it is transferredto the credit side of the partner's capital account in their profit sharing ratio.
Regards
divisible profits is a profit which is available for dividend to shareholders .after creating the provisions, reserves and funds out of business profits.
net divisible profit implies the amount which is left after adjusting items such as interest on capital, interest on drawings, salary, commission etc. it is the balancing fifure on the debit side of the profit and loss appropriation account. this profit is distributed among the partners and hence it is transferredto the credit side of the partner's capital account in their profit sharing ratio.
Regards