Profit & Loss Appropriation Account is prepared to _______________

To find out divisible profit

The correct answer is option 2- To find out divisible profit.

Profit and Loss Appropriation Account is an extension of the Profit and Loss Account of the firm. It shows how the profits are appropriated or distributed among the partners. All adjustments in respect of partner’s salary, partner’s commission, interest on capital, interest on drawings, etc. are made through this account. It starts with the net profit/net loss as per Profit and Loss Account. After all the adjustments, divisible profits comes out which is distributed among partners in their profit sharing ratio.