The Profit and Loss Appropriation Account is merely an extension of the Profit and Loss Account of the firm, which, among the following, is not shown in the Profit and Loss Appropriation Account?
Answer & explanation
Correct answer: option 2
The correct answer is Option (2) → All adjustments in respect of payment to Vendor.
The Profit and Loss Appropriation Account is an extension of the Profit and Loss Account, prepared only by partnership firms to show the distribution (appropriation) of net profit among partners.
It includes:
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Adjustments relating to partners only, such as:
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Partner’s salary or commission
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Interest on capital
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Interest on drawings
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Transfer to reserves
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Distribution of profit among partners
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However, payments or adjustments relating to outsiders (e.g., vendors, creditors) are not shown in this account — they belong to the Profit and Loss Account or Realisation/Capital Accounts, not appropriation.