Schedule BS - Can Balance Sheet show amount lesser than Profit Loss Account

 Balance Sheet and Profit & Loss Account Reconciliation The Balance Sheet and Profit & Loss Account should be reconciled to ensure accuracy:

 1. _Profit & Loss Account_: The net profit of ₹9 lakhs is correctly reflected in the Profit & Loss Account.

 2. _Balance Sheet_: The Balance Sheet shows the Proprietor's Capital as ₹7.6 lakhs, which is the opening capital plus the net profit minus the personal withdrawal.

 Accounting for Personal Withdrawal The personal withdrawal of ₹2.4 lakhs is not a business expense, but rather a withdrawal from the proprietor's capital:

1. _Reduce Proprietor's Capital_: The personal withdrawal reduces the Proprietor's Capital, which is correctly reflected in the Balance Sheet.

2. _No impact on Profit & Loss Account_: The personal withdrawal does not affect the Profit & Loss Account, as it is not a business expense.

Balance Sheet and Profit & Loss Account Matching The Balance Sheet and Profit & Loss Account are correctly matched:

 1. _Source and Application of Funds_: The Source and Application of Funds sections in the Balance Sheet are correctly matched, showing the Proprietor's Capital as ₹7.6 lakhs.

 2. _No discrepancy_: There is no discrepancy between the Balance Sheet and Profit & Loss Account, as the personal withdrawal is correctly accounted for.

Conclusion The Balance Sheet and Profit & Loss Account are correctly prepared, and there is no issue with the reconciliation. The personal withdrawal of ₹2.4 lakhs is correctly accounted for as a reduction in the Proprietor's Capital.

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