Transactions involving nominal accounts resulting in adjustment of losses from profit loss account

Transactions involving nominal accounts which represent adjustment/transfer of losses from the profit and loss account do not form cross transactions and thus do not bring about a change in fund (working capital).

Contingency Reserve absorbing the loss

Dr. Contingency Reserve a/c
Cr. Profit and Loss a/c
Non-Current Liability
Non-Current

n~11 t~3 «Note~11_Topic~4 » n~12 t~1