Choose the correct option from the following regarding sequencing of items given below in case of final accounts of partnership firm.

(A) Salary to employee
(B) Partner’s salary
(C) Net profit
(D) Divisible profit
(E) Manager’s Commission

Choose the correct answer from the options given below.

(A), (E), (C), (B), (D)

The correct answer is option 3- (A), (E), (C), (B), (D).

Final accounts of partnership firm are prepared in the following manner-
* Trading account
* Profit and loss account
* Profit and loss Appropriation account
* Capital account of partners
* Balance sheet

(A) Salary to employee - Employees get paid first. It is debited to profit and loss account.
(E) Manager’s Commission - The manager's commission might be based on the overall performance. It is normally a percentage of profit. It is debited to profit and loss account.
(C) Net profit - After charging all expenses to profit and loss account, we can calculate the net profit.
(B) Partner’s salary - Net profit is transferred is profit and loss appropriation account. Salary to partners is an appropriation of profits. This implies that it will be restricted to profits of the business and will not be drawn in the periods of loss.
(D) Divisible profit - Divisible profit is calculated from the remaining profit after appropriating all expenses in profit and loss appropriation account. This profit is transferred to partners capital account in their profit sharing ratio.