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What is the difference between partner's capital AC and profit and loss appropriation ac? And when is it used? Respected faculties please help me clear my confusion. Thank you.
Answers (4)
Profit and Loss Appropriation A/c appropriates profit for the year - how profit gets distributed like partner's salary, interest on capital and remaining net profit. It is for a particular year and closed after appropriaton. Capital accounts on the other hand show amount owed by firm to partners till date are not closed.
Sahibdeep Singh
Profit and Loss Appropriation A/c appropriates profit for the year - how profit gets distributed like partner's salary, interest on capital and remaining net profit. It is for a particular year and closed after appropriaton. Capital accounts on the other hand show amount owed by firm to partners till date are not closed.
And are they both used in admission, retirement and death of a partner????
Thread Starter
Chris TopherAnd are they both used in admission, retirement and death of a partner????
Yes, it will be based on the requirements asked in the question.
Thread Starter
Chris TopherAnd are they both used in admission, retirement and death of a partner????
Capital accounts yes. P&L appropriation is usually not required to be made at that time.
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