Match List I with List II in context of partnership firm.

 Choose the correct answer from the options given below.

A-I, B-III, C-IV, D-II

The correct answer is option 4- A-I, B-III, C-IV, D-II.

 * 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.

For example, if available profit is ₹60,000 and partner salaries are ₹40,000 and ₹30,000, total appropriations become ₹70,000, which is more than profit. The appropriation ratio will be 40,000 : 30,000 = 4 : 3. Therefore, ₹60,000 will be distributed in the ratio 4 : 3 instead of giving the full salary amount.

* 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.

For example, if available profit is ₹1,00,000 and partner salaries are ₹20,000 and ₹10,000, total appropriations become ₹30,000. After giving these salaries, the remaining ₹70,000 will be distributed among partners in their agreed 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.