wiz-icon
MyQuestionIcon
MyQuestionIcon
1
You visited us 1 times! Enjoying our articles? Unlock Full Access!
Question

Is rent paid to a partner an appropriation of profits?

A
Yes.
No worries! We‘ve got your back. Try BYJU‘S free classes today!
B
No.
Right on! Give the BNAT exam to get a 100% scholarship for BYJUS courses
C
If partner's contribution as capital is maximum.
No worries! We‘ve got your back. Try BYJU‘S free classes today!
D
If partner is a working partner.
No worries! We‘ve got your back. Try BYJU‘S free classes today!
Open in App
Solution

The correct option is C No.
Partner's rent unless provided in the deed has to be treated as a charge against profit and so it is transferred to profit and loss a/c. Rent paid by a firm is such an expenditure which is incurred irrespective of any partner the rent paid is debited to P/L account instead of Appropriation account.'

flag
Suggest Corrections
thumbs-up
0
Join BYJU'S Learning Program
similar_icon
Related Videos
thumbnail
lock
Calculating Salary/Commission
ACCOUNTANCY
Watch in App
Join BYJU'S Learning Program
CrossIcon