Accounting for IGCSE & O level - Preparation Of Financial Statements (Section 26 - No. 44)
What is the purpose of an 'appropriation' account in a partnership?
To record the firm's income and expenses.
To show the distribution of profits or losses among the partners.
To prepare the Statement of Financial Position.
To record all transactions between partners.
Explanation
The appropriation account shows the allocation of profits (or losses) among partners based on the partnership agreement.
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