The correct order of preparation of accounts in case of partnership is :
(A) Trading Account
(B) Balance Sheet
(C) Profit and Loss Account
(D) Profit and Loss Appropriation Account
(E) Partners' Capital Account
Choose the correct answer from the options given below :
Answer & explanation
Correct answer: option 3
The correct answer is Option (3) - (A), (C), (D), (E), (B).
The correct order of preparation of accounts in case of partnership is:
A) Trading Account – To determine the gross profit or loss.
C) Profit and Loss Account – To calculate the net profit or loss.
D) Profit and Loss Appropriation Account – To divide the profit or loss among the partners.
E) Partners' Capital Account – To record the movements in the capital of each partner.
B) Balance Sheet – To show the financial position of the partnership at the end of the period.