Question : Which of the following items is not dealt with through a Profit and Loss Appropriation Account?
Option 1: Interest on partner's loan
Option 2: Partner's salary
Option 3: Interest on partner's capital
Option 4: Partners commission
Correct Answer: Interest on partner's loan
Solution : Answer = interest on partner's loan
Interest on a partner's loan is not typically dealt with through a profit and loss appropriation account. Instead, it is usually accounted for separately as an expense in the income statement or as an adjustment to the partner's capital account. Interest on the loan is charged against profit; interest on the loan shall be paid even if there are losses. Hence, the correct option is 1.
Question : Which one of the following items will not come in the Profit and Loss Appropriation Account?
Option 1: Interest on partners capital
Option 2: Salary to partner
Option 3: Commission to partner
Option 4: Interest on loan to a partner
Question : Which one of the following items cannot be recorded in the profit and loss appropriation account?
Option 1: Interest on capital
Option 2: Interest on drawing
Option 3: Rent paid to partner
Option 4: Partner's salary
Question : Pick the odd one out of the following:
Option 1: Rent to partners
Option 2: Manager's commission
Option 3: Interest on partner's loan
Option 4: Interest on partner's capital
Regular exam updates, QnA, Predictors, College Applications & E-books now on your Mobile