Read the following passage and answer the questions given below.

Ram and Shyam are partners sharing profits in the ratio of 3:2. Their capitals as on 31st March 2022 were ₹5,00,000 and ₹3,00,000 respectively. There is no partnership deed but both partners agreed for the interest on capital @ 5% p.a. and salary to Shyam of ₹25,000 annually. Shyam salary is debited to profit and loss account. On preparing accounts it was found that Interest on capital is omitted and manager's commission was not given which is 5% of the net profit before charging such commission. Profits after Shyam salary was ₹2,49,300.

Where will the manager's commission be charged?

Debit side of Profit and loss A/c

The correct answer is option 1- Debit side of Profit and loss A/c.

The manager's commission is charged against the profits for the partnership firm which means the firm has to give this whether it earns a profit or not. So, it is written down in the debit side of profit and loss A/c.