Did you like how we did? Rate your experience!

4.5

satisfied

46 votes

What is the difference between net profit and surplus i.e.?

Net profit equals Gross Receipts less Cost of Goods sold plus other income minus expenses. Surplus is an outdated term for Retained Earnings which is a balance sheet account that reflects prior years earnings that have not been paid out in dividends. If there are cumulative losses over the years that reduce Retained Earnings to a negative amount, the negative amount is referred to as a deficit in Retained Earnings.