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Standard XII
Accountancy
Question

Capital losses are:
  1. shown in the balance sheet on the assets side.
  2. Debited to profit & loss account.
  3. shown in the balance sheet on the liability side.
  4. None of the above.

A
Debited to profit & loss account.
B
shown in the balance sheet on the assets side.
C
shown in the balance sheet on the liability side.
D
None of the above.
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Solution
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Capital loss is a loss suffered by a business on the sale of a fixed asset or it is incurred on raising capital of a joint stock company. This is not a recurring loss or is not made in the ordinary course of the business. Capital loss is shown in the asset side as a fictitious asset which is gradually written off out of profits every year.

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