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Profit & Loss is getting added to Liability instead of deducting!

By
Abdul Gafoor GK
on 1/29/16, 10:41 AM 611 views

Hi All,

I'm a bit confused. Need help from experts here. I'm using Odoo v8.0. When I checked P&L of 2015, it showed me a + figure. But when I checked Balance Sheet of 2015, this P&L amount is getting added to Liability. Shouldn't it be deducted from Liability?

Let me show it through an example. My total income is 1,000.00 and total expense is 700.00, which makes a P&L summary 300.00. In Balance Sheet the whole Liability accounts are listed in -ve and total Liability is -900.00, which is fine for me. But why is P&L 300.00 shown as -300.00 in Balance Sheet and be added to Liability making it total -1,200.00? My impression is that Liability should be -600.00. Please help if I am wrong here and how am I wrong. Or if it is some settings I need to configure in Odoo to have the correct value.

Thank you,

0
Ermin Trevisan
On 1/30/16, 2:45 AM

Profit is a liability towards the business owners / increases the own capital of the company. But this is accounting 101 :-)

Thanks Ermin. Someone asked the same question in bayt.com and I did get the answer. According to answers from there profit comes under equity and will be shown as Liability.

Abdul Gafoor GK
on 1/30/16, 4:50 AM

As I said... :-)

Ermin Trevisan
on 2/1/16, 2:39 AM

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Asked: 1/29/16, 10:41 AM
Seen: 611 times
Last updated: 1/30/16, 4:47 AM