Question

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

Answer 1

Explanation:

It is made after preparation of profit and loss account. Preparation of P&L account is based on a partnership agreement. Matching principle is followed i.e. expenses for an accounting period are matched against related incomes. Matching principle is not followed while preparing a P&L appropriation account.

Answer 2

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It is the special acc to prepare to show the profit and loss among the partner or partners capital❤️