Accounting for IGCSE & O level - Preparation Of Financial Statements (Section 10 - No. 15)
What is the correct order of the following stages for preparing an appropriation account?
Deduct partners' salaries, transfer net profit to current accounts, deduct interest on capital
Deduct interest on capital, deduct partners' salaries, transfer net profit to current accounts
Transfer net profit to current accounts, deduct interest on capital, deduct partners' salaries
Deduct interest on capital, transfer net profit to current accounts, deduct partners' salaries
Explanation
The order of the process starts with deducting interest on capital, followed by deducting partner's salaries and at the end the net profit will be transferred to the current accounts.
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