Which of the following are charges against profits? (A) Rent paid to…

The correct answer is Option (1) → (A), (B) and (D) only

A charge against profit must be paid whether the firm earns a profit or not, so it goes to the Profit and Loss Account. An appropriation of profit is a sharing of profit among partners under their agreement, so it goes to the Profit and Loss Appropriation Account.

(A) Rent paid to partners Correct. Rent is paid for the use of a partner’s property, a business expense like rent paid to anyone else.

(B) Interest on loan, paid to partners Correct. A partner’s loan is a liability of the firm, and interest on it is payable even in a year of loss.

(C) Interest on Capital Incorrect. It is allowed to partners out of profit under the deed, so it is an appropriation, shown in the Profit and Loss Appropriation Account.

(D) Manager’s commission Correct. The manager is an employee, and his commission is a business expense charged before profit is divided.