Question

How do we prepare profit and loss appropriation account without net profit??

Answer 1

Explanation:

Basically in lay man's term it is an account prepared to show how the company appropriates or distributes the profit earned for a relevant financial year. ... It is debited with interest on capital and remuneration to partners and credited with the net profits b/d from the profit and loss account and interest on drawings.

Answer 2

Explanation:

Charge v/s Appropriation Charge against profit means the deduction of any amount from the firm's revenue to reach Net Profit or Loss. Hence, the Profit and Loss Account is prepared. Hence, the Profit and Loss Appropriation Account is prepared.