Assertion: A Profit and Loss adjustment account is required for the rectification of errors or omissions. Reasoning: Profit and Loss adjustment a/c is prepared to rectify those errors or omissions which are left while preparing final accounts and found after distribution of profits among partners.

Both Assertion (A) and reasoning (R) are correct and R is the correct explanation of A. Both Assertion (A) and reasoning (R) are correct and but R is not the correct explanation of A. Assertion (A) is true but Reasoning (R) is not correct. Assertion (A) is not true but Reasoning (R) is correct.

Both Assertion (A) and reasoning (R) are correct and R is the correct explanation of A.

Sometimes a few omissions or errors in the recording of transactions or the preparation of summary statements are found after the final accounts have been prepared and the profits distributed among the partners. The omission may be in respect of interest on capitals, interest on drawings, interest on partners’ loan, partner’s salary, partner’s commission or outstanding expenses. There may also be some changes in the provisions of partnership deed or system of accounting having impact with retrospective effect. All these acts of omission and commission need adjustments for correction of their impact. Thus, Both Assertion (A) and reasoning (R) are correct and R is the correct explanation of A.