Question

is rent payable for partner premises an appropriation of profit. discuss​

Answer 1

Answer:

Rent is paid for the use of asset of partner in business. Rent paid is an expense for business not as distribution of profit to partners. It is charged to profit and loss account not from profit and loss appropriation account. Rent paid to a partner is charged to profit not appropriation of profit.

Here, the complexity is, the rent is payable to partner of the bussiness. Well, complexity can be removed by understanding nature of the transactions.

“Sharing of profit” is a transaction where the partner gets something in the capacity of a partner of the firm. That has to be either profit or loss or interest on capital.

“Paying off the rent to use building or machinery” is a transaction where firm receive the service (giving land, building or machinery, on rent,is a service) from a person who happens to be the partner. That's it.

Consideration should be of “natures of the transactions” to deal with the problem, related to accounting.

To sum up, yes, rent is expense of the bussiness, to charge it against income, we put it in profit and loss account, then we reach to correct profit and the we distribute such correct profit amongst partners in profit and loss appropriate account.

Answer 2

Explanation:

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