Question

why is Profit and Loss appropriation account prepared? ​

Answer 1

Answer:

P&L Appropriation Account is prepared to show how the company appropriates or distributes the profit earned during the year. It is an extension of Profit and loss a/c. The purpose is to allow the adjustments to be made to the profits so that the final income can be divided among the partners as per the agreed terms.

Explanation:

Thus, profit and loss Appropriation account is prepared to show how net profit is distributed among the partners.