Where will be the manager's commission shown by a partnership firm?
Answer & explanation
Correct answer: option 1
The correct answer is option 1- Profit and Loss account.
Manager's commission is not related to partner. It is expenditure of firm and shown in Profit & loss account on the debit side. This account records all the income and expenses of the firm. The manager's commission is considered an expense of the business, so it is shown here.