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Interest on Drawings-Withdrawn in the Beginning of Every Month

Which of the ...

Question

Which of the following appear in the Profit & Loss Appropriation Account?

A

Salary/Commission to a partner.

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B

Salary/Commission to a manager.

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C

Interest on capital of a partner.

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D

Interest on loan of a partner.

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E

A & C

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Solution

The correct option is E A & C
A AND C.
A Profit and loss Appropriation account is an account which is prepared after profit and loss account and is usually prepared by partnership firms for distribution/allocation of profit earned by the firm to partners. Only items relating to partners will be entered in Profit and loss Appropriation like interest on capital, profit, interest on drawings, salary/commission to partners.

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