A, B & C are partners sharing profits in the ratio of 3:2:1. C died on 1st July, 2023. On this date, final accounts were prepared to ascertain profits for the period. It resulted in a profit of ₹1,75,000 to the firm. To give effect to the above: |
Profit and loss A/c will be debited Profit and loss Appropriation A/c will be debited Profit and loss A/c will be credited Profit and loss Appropriation A/c will be credited |
Profit and loss A/c will be debited |
The correct answer is option 1- Profit and loss A/c will be debited. Profit and loss account is prepared to know the profit of the firm after debiting all expense and crediting all incomes of the firm. The journal entry for this- Profit and loss A/c Dr. To Net profit. |