Assertion (A): Rent to a Partner is transferred to the debit of Profit & Loss Account but is not transferred to the debit of Profit and Loss Appropriation Account.
Assertion (A): Rent to a Partner is transferred to the debit of the Profit & Loss Account but is not transferred to the debit of the Profit and Loss Appropriation Account.
Reason (R): Rent to a Partner is an expense that is a charge against profits and not an appropriation of profit. Hence, it is transferred to the debit of the Profit and Loss Account.
in the context of the above two statements, which of the following is correct?
a) Assertion (A) and Reason (R) are correct but the Reason (R) is not the correct explanation of Assertion (A).
b) Both Assertion (a) and Reason (R) are correct and Reason (R) is the correct explanation of Assertion (A).
c) Assertion (A) is correct but the Reason (R) is not correct.
d) Assertion (A) is not correct but the Reason (R) is correct.
Anurag Pathak Changed status to publish April 15, 2023
Ans – b)
The Rent to the partner is considered a charge against profit. Thus it is debited to the profit and loss Account.
Assertion (A) is correct and Reason (R) is the correct explanation of it.
Anurag Pathak Changed status to publish April 4, 2023
