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How is profit to incorporation treated in accounts?


Tuhin panja 14th Mar, 2021
Answer (1)
dandeharitha 14th Mar, 2021

Hello aspirant,

Profit earned after incorporation is revenue profit, which is available for dividend. Profit of prior period and post period however divided separately because the prior period profit and loss hence always credited and charged from capital reserve A/c.

pre-incorporation contract is an agreement that is made by a person at the behest of a company or corporation that does not exist at the time of signing such agreement.

Thankyou


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