A and B are partners in a firm. Partner B allowed firm to use his personal building for the office purpose and that payment of rent is wrongly debited to profit and loss appropriation account instead of which account?

P & L A/c

The correct answer is option 1- P & L A/c.

Partner B allowed the firm to use his personal building for office use. Payment made as rent was wrongly debited to the Profit and Loss Appropriation Account. The correct treatment is to charge it as a business expense, since it is not related to profit distribution among partners. So, it is debited to profit and loss account on the debit side as a charge against profit.