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CBSE Class 12-commerce Answered

Why salary of 30,000 will be add in profit in profit and loss a/c.And  according to the rules salary is charge against profit so why will take it in appropriation a/c
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Asked by Smitakhadayate20 | 17 Mar, 2019, 07:52: AM
answered-by-expert Expert Answer

In a normal business entity, amount of salaries paid to the employees are debited to the profit and loss account and are therefore, is a charge against profits. On the other hand, in case of partnership accounts, any amount of remuneration paid to the partners in the form of salary, commission, etc., is an appropriation out of profits and not a charge against profits.

Accordingly, if the amounts are paid as remuneration to the partners, they are treated as appropriation and not a charge against profits.

Answered by Surabhi Gawade | 18 Mar, 2019, 09:32: AM

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