Question

List the items that are debited to Profit and Loss Appropriation Account.

Answer 1

Profit and loss Appropriation account is prepared to show the distribution of net profit among the partners. It is only an extension of profit and loss account.

The profit and loss appropriation account is debited with items which are appropriation of profits. Such items are:-

1.Salary to partners.

2.Interest on capital.

3. Commission to partners.

4.Transfer to reserves.

5.Share of partners in the profits.