Accounting for Partnership: Basic ConceptsClass 12 Accountancy Part 1 Assertion & Reason Questions

Assertion (A): The Profit and Loss Appropriation Account is prepared after the Profit and Loss Account.

Reason (R): The Profit and Loss Appropriation Account shows how the net profit, as ascertained by the Profit and Loss Account, is distributed among the partners.

Assertion (A): If the Partnership Deed is silent, no interest is payable on the capital contributed by partners.

Reason (R): The Indian Partnership Act, 1932, mandates a 6% p.a. interest on capital in the absence of a deed.

Assertion (A): Interest on a partner's loan is debited to the Profit and Loss Appropriation Account.

Reason (R): Interest on a partner's loan is considered a charge against profit.