The correct answer is option 4- A-I, B-III, C-IV, D-II.
LIST I
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LIST II
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| A) Appropriation are more than available profit |
I) Distribute available profit in ratio of appropriation |
| B) Appropriation is less than available profit |
III) Distribute excess of available profit in the profit-sharing ratio |
| C) Rectify errors after preparation of the final account |
IV) Profit and loss Adjustment Account |
| D) A statement tells about the financial position of a firm |
II) Balance sheet |
* Appropriation are more than available profit- In this case, whole amount of appropriation cannot be given to partner as profit is less. So, the appropriation ratio is calculated and available profit is distributed in this ratio.
* Appropriation is less than available profit - In this case, whole amount of appropriation can be given to partner as profit is more than appropriation. So, after providing the appropriation, remaining profit is distributed in profit-sharing ratio.
* Rectify errors after preparation of the final account- If any error is caused while making final account and it is found out after its preparation then a separate account named profit and loss adjustment account is made to rectify these errors.
* A statement tells about the financial position of a firm- Balance sheet is a statement that shows the financial position of the partnership firm at the end of the year at a particular time. |
