AA-19-Profit Distribution

Dear Raja PM,

Thanks for your reply. 

Dear Mr. Parsad Nilugal,

Thanks a lot to give detailed reply.

Please let me know that net profit from p&l can directly transfer to partners account by journal entry or we have to prepare 1st profit appropriation account and then transfer profit from that account?

Further, if we prepare profit appropriation account what would be journal entry of it ? 

We  have prepare  profit  & Loss  Appropriation  and  profit  distribution . as  follows  . 

Profit  and  Loss  Appropriation  A/c  Dr 

To  Net  profit   of   X                 A/c    Cr 

To Net  profit   of    Y                A/c     Cr 

(  profit  distributed  among the partners ) 

In  first reply  -  Net  profit   transfer  entry  . 

Profits for shareholders and owner

Appropriation doesnt distribute profits but normal profit and loss does. I have attached acca global for your convenience. You can follow this format and use AS standards for everything. Use company acts ratios if you suspect that your ratios will be hindered. I still think ratios can be impacted so contact someone to find out the truth