Liability reduces profit?

May I request someone to explain how does the liability reduces our profit in our P&L? Kindly help me in getting this basic.

Provision vs liability:For example... Is it not better to show it as Liability itself instead of creating a provision because by creating a provision my Net profit is directly going for a hit. Liability I am going to show only in balance sheet. My p&l is not affected. Please enlighten me on this understanding.

Replies (1)
Take this example of a salary entry for March.

Salary a/c (provision for march) Dr.
To Salary Payable (liability) Cr.

You created both provision and liability. Only liability cannot be created. Something has to be debited i.e either provision or expense in P&L account.

If the payment is made, there is no liability, in place of liability bank account is credited.

Hope this is what you wanted to clarify.

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