Match list I with list II and choose the correct ans from the options…

Match list I with list II and choose the correct ans from the options given below:

LIST 1	LIST 2
A) Transfer of accumulated profits	I) Realisation account
B) Unrecorded assets sold on dissolution of firm	II) Profit and loss account
C) Manager's Commission	III) Profit and loss Appropriation account
D) Partner's commission	IV) Partner's Capital Account

Answer & explanation

Correct answer: option 2

The correct answer is Option (2) → A-IV, B-I, C-II, D-III

Each item goes to the account that records it:

(A) Transfer of accumulated profits — this matches (IV) Partner’s Capital Account. Reserves and undistributed profits belong to the partners and are credited to their capital accounts in the profit sharing ratio.

(B) Unrecorded assets sold on dissolution of firm — this matches (I) Realisation account. Cash from an unrecorded asset is a gain on realisation: Bank A/c Dr. To Realisation A/c.

(C) Manager’s Commission — this matches (II) Profit and loss account. A manager is an employee, so his commission is an expense charged before the profit is found.

(D) Partner’s commission — this matches (III) Profit and loss Appropriation account. A partner’s commission is a share of profit, so it is an appropriation.

NCERT (2026-27 edition):
Adjustment for Accumulated Profits and Losses – “Sometimes a firm may have accumulated profits not yet transferred to capital accounts of the partners. These are usually in the form of general reserve, reserve and/or Profit and Loss Account. The new partner is not entitled to have any share in such accumulated profits. These are distributed among the partners by transferring it to their capital current accounts in old profit sharing ratio.”

NCERT (2026-27 edition):
Accounting Treatment

Extract from the NCERT textbook

NCERT (2026-27 edition):
Distribution of Profit among Partners

Extract from the NCERT textbook

NCERT (2026-27 edition):
Profit and Loss Appropriation Account – “Profit and Loss Appropriation Account is merely 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.”

Match list I with list II and choose the correct ans from the options given below:

LIST 1	LIST 2
A) Transfer of accumulated profits	I) Realisation account
B) Unrecorded assets sold on dissolution of firm	II) Profit and loss account
C) Manager's Commission	III) Profit and loss Appropriation account
D) Partner's commission	IV) Partner's Capital Account

Answer & explanation

Correct answer: option 2

The correct answer is Option (2) → A-IV, B-I, C-II, D-III

Each item goes to the account that records it:

(B) Unrecorded assets sold on dissolution of firm — this matches (I) Realisation account. Cash from an unrecorded asset is a gain on realisation: Bank A/c Dr. To Realisation A/c.

(C) Manager’s Commission — this matches (II) Profit and loss account. A manager is an employee, so his commission is an expense charged before the profit is found.

(D) Partner’s commission — this matches (III) Profit and loss Appropriation account. A partner’s commission is a share of profit, so it is an appropriation.

NCERT (2026-27 edition):
Accounting Treatment

Extract from the NCERT textbook

NCERT (2026-27 edition):
Distribution of Profit among Partners

Extract from the NCERT textbook