Match List – I with List – II. List - I List - II (A) Rent to partner…

The correct answer is Option (2) → (A)-(II), (B)-(IV), (C)-(III), (D)-(I)

Charges against profit go to the Profit and Loss Account; distributions of profit among partners go through the Profit and Loss Appropriation Account.

(A) Rent to partner — this matches (II) Debit side of Profit and Loss A/c. Rent for a partner’s property used by the firm is a business expense, a charge against profit.

(B) Interest on Drawings — this matches (IV) Credit side of Profit and Loss Appropriation A/c. It is recovered from partners and adds to the profit available for distribution.

(C) Bad Debts Recovered — this matches (III) Credit side of Profit and Loss A/c. It is a gain of the business, so it is credited to the Profit and Loss Account.

(D) Salary to Partner — this matches (I) Debit side of Profit and Loss Appropriation A/c. It is an appropriation of profit to a partner.

Note: The book prints “change against profits”; it means “charge against profits”.