Differentiate between ‘Profit & Loss Appropriation Account’ and ‘Profit & Loss Suspense Account’. (Delhi and Al 2015 C)

SOLUTION

Profit & loss Appropriation Account is prepared to show the distribution of Net Profit among the partners. Profit & Loss Suspense Account is prepared to adjust the Deceased Partner’s Share of Profit till the date of death of the partner when profit-sharing ratio of continuing partners does not change.



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