S1: The Profit and Loss Appropriation Account is prepared by a company. S2: The Profit and Loss Appropriation Account is prepared by a partnership firm. Which statement(s) is/are correct? MCQ with Answer and Explanation
S1: The Profit and Loss Appropriation Account is prepared by a company. S2: The Profit and Loss Appropriation Account is prepared by a partnership firm. Which statement(s) is/are correct?
A. Both S1 and S2
B. Neither S1 nor S2
C. S2 only
D. S1 only
Answer: Option C
Solution (By JKSSB Mock Tests)
A company does not prepare a Profit and Loss Appropriation Account; it transfers profits to reserves and dividends via the Statement of Changes in Equity. Only a partnership firm prepares this account to distribute profits among partners. S1 is incorrect, S2 is correct.
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