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Difference Between Drawings Against Profit And Drawings Against Capital

C
Chhaya
12/03/2018 0 0

Drawings against profit is a part of expected profit whereas drawings against capital is a part of capital.

Drawings against profit is debited to Profit and loss account where as drawings against capital is debited to capital account. 

Drawings against profit reduces profit but drawings against capital reduces capital and not profit.

 

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