P & L Appropriation a/c
This query is : Resolved
Anjan S Mehta
(Querist)
12 August 2010
what is Profit & Loss Appropriation A/C? kindly explain with example
CA Ravi Sisodia
(Expert)
12 August 2010
Profit and Loss apportionment account is prepared by the partnership firms. Thru this nett result will be apportioned among the partners.It will be prepared on the closure date.
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CA Ravi Sisodia
(Expert)
12 August 2010
Profit and loss Appropriation A/C shows the appropriation(distribution)of the profit calculated by preparing P&L A/c,it' debit side shows items like the dividend proposed by the company, provision for Corporate Dividend tax (on such
dividend), legal reserve and Interim Dividend.
While it's credit side shows the profit of P&L A/c, balance of surplus of last year, provision no longer required. The balancing figure, profit (Surplus)is shown in the balance sheet under the head 'Reserves and surplus'.
It should be noted that even though The Companies Act does make it compulsory ti prepare this A/c, it is advisable to do so because Profit & loss shows only expenses and charges against profit, it does not shows it's appropriation.
dividend), legal reserve and Interim Dividend.
While it's credit side shows the profit of P&L A/c, balance of surplus of last year, provision no longer required. The balancing figure, profit (Surplus)is shown in the balance sheet under the head 'Reserves and surplus'.
It should be noted that even though The Companies Act does make it compulsory ti prepare this A/c, it is advisable to do so because Profit & loss shows only expenses and charges against profit, it does not shows it's appropriation.
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13 August 2010
PL appropriation account is basically a distribution account prepared after arriving at net profit after tax (PAT) figure.
The entries of utilization / transfer of this PAT to reserves & surplus etc is being done in the PL appropriation account.
The entries of utilization / transfer of this PAT to reserves & surplus etc is being done in the PL appropriation account.
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