Neha, a partner, owns a building from where the firm carries its business. The firm pays her ₹ 10,000 as the rent for the building. Will it be transferred to Profit & Loss Account or Profit & Loss Appropriation Account? Why?
Neha, a partner, owns a building from where the firm carries its business. The firm pays her ₹ 10,000 as the rent for the building. Will it be transferred to Profit & Loss Account or Profit & Loss Appropriation Account? Why?
Anurag Pathak Changed status to publish April 9, 2023
Rent to the Partner is considered a charge against Profit. Thus it would be recorded at the debit side of Profit and Loss Account.
Note:- Charge against profit are the expense that is to be paid by the firm irrespective of profit or Loss at the end of the year.
Anurag Pathak Answered question April 4, 2023
