Accountancy Part AAccounting for Partnership

Which of the following item is not shown in the Profit and Loss Appro…

Which of the following item is not shown in the Profit and Loss Appropriation Account?

Answer & explanation

Correct answer: option 4

The correct answer is Option (4) → Depreciation

The Profit and Loss Appropriation Account starts from the net profit already worked out in the Profit and Loss Account and shows how it is shared among the partners. Depreciation is a business expense charged before net profit is found, so it belongs to the Profit and Loss Account.

Option (1) Partner’s Salary — Shown in the Appropriation Account. A partner’s salary is a share of profit, not an expense.
Option (2) Interest on Drawings — Shown in the Appropriation Account. It is credited there and adds to the profit to be shared.
Option (3) Interest on Capital — Shown in the Appropriation Account. It is a return to the partners out of profit.

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.”