Question

For interest in capital, _______________ a/c is to be debited under past adjustments through profit and loss adjustment account

• A. Profit and loss
• B. Profit and loss adjustment
• C. Partner's capital
• D. Partner's current

Answer 1

The correct option is B Profit and loss adjustment

After the preparation of Profit and Loss Account and Balance Sheet, if any error or omission is noticed, then these errors or omissions are adjusted by opening Profit and Loss Adjustment Account in the subsequent accounting period without altering old Profit and Loss Account.