The steps in the Process of Preparing Profit and Loss Appropriation account are:

(A) Transfer the net profit to the credit side of P & L Appropriation A/c
(B) Divide the Profit among partners in the Profit Sharing ratio
(C) Ascertain net profit after providing for all charges
(D) Debit the P & L Appropriation A/c with all appropriations like partners salary etc.
(E) Credit the P & L Appropriation A/c with interest on drawing and deficiency on account of partner's guarantee of earnings to the firm.

Choose the correct answer from the options given below.

(C), (A), (D), (E), (B)

The correct answer is option 2- (C), (A), (D), (E), (B).

The steps in the Process of Preparing Profit and Loss Appropriation account are:

(C) Ascertain net profit after providing for all charges- This is the first step where we determine the final profit after all expenses and costs have been deducted from revenue by preparing the profit and loss account.

(A) Transfer the net profit to the credit side of P & L Appropriation A/c- The net profit is then transferred to the credit side of the Profit and Loss Appropriation Account. If there is loss then it will be transferred to the debit side.

(D) Debit the P & L Appropriation A/c with all appropriations like partners salary etc.- Any appropriations, such as the salary to partners, bonuses, etc., are debited to the P&L Appropriation Account as these are losses to the business.

(E) Credit the P & L Appropriation A/c with interest on drawing and deficiency on account of partner's- Any credits like interest on partners’ drawings or deficiency due to partner's guarantee are credited to the P&L Appropriation Account as these are gains for the business.

(B)  Divide the Profit among partners in the Profit Sharing ratio- Finally, the remaining profit after all adjustments is divided among the partners according to their profit-sharing ratio.