Accountancy Part AAccounting for Partnership

For distribution of profits made during a year among the partners, th…

For distribution of profits made during a year among the partners, the following account is debited:

Answer & explanation

Correct answer: option 1

The correct answer is Option (1) → Profit and Loss Appropriation A/c

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.”