What is the sequence of preparing accounts by a partnership firm?

a) Profit & Loss Appropriation A/c
b) Capital Account
c) Profit & Loss A/c
d) Balance Sheet

cabd

The correct answer is option 3- cabd.

The correct sequence for the final accounts of a partnership firm is:

(c) Profit and Loss Account: This account builds upon the gross profit from the Trading Account, incorporating operating expenses and income to arrive at the net profit or loss for the period.

(a) Profit and Loss Appropriation Account: This account takes the net profit or loss from the Profit and Loss Account and shows how it's distributed among the partners according to their profit-sharing ratio. It may also include allocations for reserves or other appropriations.

(b) Partner's Capital Account: This account reflects each partner's initial capital contribution, any adjustments (drawings, interest on capital), and their final capital balance after profit or loss allocation.

(d) Balance Sheet: This final statement presents the firm's financial position at a specific date. It shows the total assets, liabilities, and capital (including the final capital balances from the Partner's Capital Accounts).