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The unfavorable balance of Profit and Loss account should be

A. Added to liabilities

B. Subtracted from current assets

C. Subtracted from capital

D. Subtracted from liabilities

Answer: Option C

Solution(By Examveda Team)

Loss is subtracted from capital account and profit is added to capital account.

This Question Belongs to Commerce >> Accounting

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Comments ( 1 )

  1. Ashwini Dhanva
    Ashwini Dhanva :
    5 years ago

    The unfavorable balance of Profit and Loss account should be
    C. Subtracted from capital
    Why

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