Question

The practice has a profit-sharing plan in place for partners. Which report is the most important to determine the profit that has been earned by the practice? List at least three questions you will ask after you have examined this report.

Answer 1

Answer
page-1 | Profit and Loss Appropriation Account is the most important to determine the pprofit that has been canned by the practic in a partnership business. It provides information about an enterprise's income and expenses which result in net profit ordnet loss. It helps a businessman or organisation evaluate the performance of an enterprise and provides a basis for forecasting future performance. Partnership means It arise out of an agreement made by two or more persons . The agreement is made regarding share profits a a business ② Such business is carried on by all or any one of them acting for alle → In the profit and Loss Account, report verily report of appropriation of propri profits. Partners become antited entitled to receive salary commission & interest, share of profit etc and also to Charged with interest on drawing. So at the time of preparing the final a accounts of a partneship business, the net profit before making adjustments for the above items is found out. These adjustments are made through the profit and Loss appropriatio account. The account may be separately opened at

page-2 may be shown as the concluding part of profit and Loss Accounts. So profit and Loss appropriation accounts is the most important part of profit of p a partneship business- > Question that I need to ked - Is partnership firm sot rip with proper agreement by two or more person as per partnership Act ? o parted worship from HAS partnership firm nahe decide to made profit sharing ratio that dire divided among their partners ? Do partnership Arsirm follow partnership deed of interest of capital, interest oon drowing, interest on loan and partners salaries and commission?