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Net profit and withdrawls

This query is : Resolved 

27 December 2018 Can Withdrawls of a person can exceed his net profit of the business. For example his net profit is Rs. 50000 but the drawing amount from business is Rs. 85000. Is it possible?

27 December 2018 Yes it's possible. Depreciation is not a cash expenditure.

28 December 2018 Net profit is calculated on accrual basis. Withdrawal from business depends on the availability of cash. If cash is available, it can be withdrawn. available cash can be more than net profit.

04 March 2019 Thank you very much for the reply.



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