Question

The concluding section of Profit and Loss account
showing the distribution of company profit is
called
P&L A/C
P&L Appropriation A/C
o Trading A/C
Balance Sheet​

Answer 1

Answer:

Distribution of Profit Among Partners

As we know a partnership is where two or more persons work together and distribute among themselves all profits and losses. But how exactly will this distribution of profit take place? Let us see the accounting entries and effects of the distribution of profit.

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Distribution of Profit among Partners

Distribution of Profit among Partners: Profit & Loss Appropriation Account

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In accordance with the provisions of the partnership deed, the profits and losses made by the firm are distributed among the partners. However, sharing of profit and losses is equal among the partners, if the partnership deed is silent.

However, certain adjustments such as interest on drawings & capital, salary & commission to partners are required to be made. For this purpose, it is customary to prepare a Profit and Loss Appropriation Account of the firm. The final figure of profit and loss to be distributed among the partners is ascertained by Profit and Loss Appropriation Account.