Partnership Fundamentals Notes3

Study Material & Notes for the Chapter 1

Partnership - Fundamentals

III. PROFIT & LOSS APPROPRITATION ACCOUNT

Table 2.3.1
Profit & Loss Account
Table 2.3.2.1
Profit & Loss Appropriation Account
Table 2.3.3.1
Appropriation > Available Profits

Profit is distributed in the ratio of appropriations to be made, determined as follows:

  • Determine the amount payable as appropriation to each partner as per the Partnership deed (e.g. Salary, commission, interest on capital)
  • Total the amount of appropriations for each partner separately
  • The ratio of total appropriations amongst partners becomes the ratio for distribution of available profits among the partners
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