Why do you prepare a P/L Appropriation a/c?

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Why do you prepare a P/L Appropriation a/c?..

Answer / divya s k

if it the case of a partnership firm, the above mentioned
answers are correct.
In case of a joint stock company, appropriation a/c is
prepared to appropriate meaning apportioning the net profit
& transferring a portion of the profits earned to various
reserve a/cs as per the requirement of the company as well
as the companies & various other acts.
the profit arrived after such appropriations is available
for the distribution as dividends to the shareholders of the
company. unless otherwise the profits cannot be distributed
as dividends.

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Why do you prepare a P/L Appropriation a/c?..

Answer / jubeda

TO KNOW THE NET PROFIT OR LOSS IN THE BUSINESS. WHEN THERE
IS ADJUSTMENT STATING THAT SALARY /COMMISSION TO PARTNER,
INTEREST ON CAPITAL, INTEREST ON DRAWINGS THEN WE PREPARE
THE PROFIT & LOSS APPROPRIATION A/C AND TO GET THE ACTUAL
NET PROFIT/LOSS OF THE FIRM/CO./BUSINESS.

Is This Answer Correct ?

11 Yes

6 No

Why do you prepare a P/L Appropriation a/c?..

Answer / jubeda

Is This Answer Correct ?

1 Yes

5 No

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