Question

preparation of profit and loss appropriation account is compulsory for which kind of business?​

Answer 1

Answer:

Profits are an important part of a business so as its allocation. That is why the Profit and Loss Appropriation Account is an important part of an organization. Profit and Loss Appropriation Account is necessary for businesses, especially partnerships because they help to allocate the net of expenditures and incomes among the various partners. Now let’s discuss various facts about the Profit and Loss Appropriation A/c.

Meaning of Profit and Loss Appropriation Account

It is a special account that a firm prepares to show the distribution of profits/losses among the partners or partner’s capital.

This account should not be confused with the typical Profit and Loss Account but rather seen as an extension of it as it is made after making the Profit and Loss Account.

Explanation:

Hope it helps to you.