State whether the following statements are True or False:
Gross Profit or Gross Loss is transferred to Balance Sheet.

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Solution

False. Net profit is transferred to the balance sheet. Gross profit is calculated by taking into account all the direct expenses and incomes. Gross profit is calculated in the Trading account and then is transferred to Profit and loss account to calculate net profit. Profit and loss account takes into account all the other incomes and expenses to calculate net profit which is then transferred to the balance sheet.

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5. An amount of net profit is added to the capital.
6. All indirect expenses are debited to trading account.
7. Balance Sheet is a statement and not an account.
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State whether the following statements are True or False:Gross Profit or Gross Loss is transferred to Balance Sheet.

State whether the following statements are True or False:
Gross Profit or Gross Loss is transferred to Balance Sheet.