Question

Difference between profit and loss appropriation account and profit and loss adjustment account

Answer 1

There is no difference between both the accounts it is name of one account between the partners to distribute profit

Answer 2

Profit & Loss Account :-

♥ It is prepared after trading account .

♥ It is prepared to ascertain net profit or net loss .

♥ This account is not prepared on the basis of partnership agreement .

♥ Expenses debited to this account are charge against profits .

Profit & Loss Appropriation Account :-

♥ It is prepared after profit & loss account .

♥ It is prepared to distribute the net profit of the year among the partners .

♥ This account is prepared on the basis of partnership agreement .

♥ Items debited to this account are appropriation of profits .