Accounting for Partnership Firms – Fundamentals · Class 12 · CBSE · Commerce Accountancy
Which of the following items is recorded on the debit side of the Profit and Loss Appropriation Account?
Practice question from Accounting for Partnership Firms – Fundamentals (Class 12 · CBSE · Commerce Accountancy), with the correct answer and a step-by-step solution.
easy · MCQ · Q-C45618
Which of the following items is recorded on the debit side of the Profit and Loss Appropriation Account?
- A.Interest on Partners' CapitalsCorrect answer
- B.Interest on Partners' Drawings
- C.Share of Profit transferred from Profit and Loss Account
- D.Partners' Salaries received from external parties
Solution
The Profit and Loss Appropriation Account is credited with net profit and interest on drawings, and debited with items of appropriation such as interest on capital, partners' salaries, partners' commission, and transfers to reserves.
More from Accounting for Partnership Firms – Fundamentals
- In the absence of a partnership deed, interest on a partner's loan advanced to the firm is allowed at what rate?
- X and Y are partners sharing profits in the ratio of 3:2. Their capitals are Rs. 2,00,000 and Rs. 1,00,000 respectively. Interest on capita…
- Under the fluctuating capital method, where is the share of profit of a partner recorded?
- A partner withdraws Rs. 10,000 at the end of each month throughout the year. If the rate of interest on drawings is 12% p.a., what will be…
Practise more Accountancy
Sign up free for adaptive practice on this chapter, with instant feedback and hints on every question.
Start practising freeFree to start · No credit card needed