Introduction:
Partnership is a type of business organization in which two or more persons come together to carry on a business with a view to earning profits.

Explanation of the given question:
In the given question, Radha and Raman are partners in a firm sharing profits and losses in the ratio of their capital contribution. The capital contributed by them is given as Rs. and .

Important concepts in partnership accounting:
1. Capital: The amount of money invested by partners in the business is called capital. It represents the owner's equity in the business.

2. Profit sharing ratio: It is the ratio in which the profits or losses of the firm are divided among the partners.

3. Current account: It is an account maintained for each partner to record the transactions related to their drawings, interest on capital, salary, commission, etc.

4. Interest on capital: Partners are entitled to receive interest on their capital at a specified rate. It is calculated on the opening balance of the capital account.

5. Salary and commission: Partners may be entitled to receive a salary or commission for their services rendered to the firm.

6. Goodwill: It is the value of the reputation and brand name of the firm. It is calculated as the excess of the purchase price over the net assets of the firm.

Accounting treatment of partnership transactions:
1. Recording of capital contribution: The capital contributed by each partner is recorded in their respective capital accounts.

2. Distribution of profits or losses: The profits or losses of the firm are distributed among the partners in the ratio of their profit sharing ratio.

3. Interest on capital: Interest on capital is credited to the respective partner's capital account and debited to the profit and loss appropriation account.

4. Salary and commission: Salary and commission paid to partners are debited to the profit and loss appropriation account and credited to their current accounts.

5. Goodwill: Goodwill is recorded in the books of the firm and distributed among the partners in their profit sharing ratio.

Conclusion:
Partnership accounting involves the recording of various transactions related to capital, profit sharing, current accounts, interest on capital, salary and commission, and goodwill. The accounting treatment of these transactions is essential to calculate the profits or losses of the firm and distribute them among the partners.

Profit and Loss Appropriation account
For the year ending on 31.03.2015
Dr. Cr.
Particulars Rs. Particulars Rs.
To Interest on Capital:
Radha 3,000
Raman 1,200
To Partner’s Salary
Radha 10,000
Raman 7,000
To Profits transferred to capital
A/cs of:
Radha 5,000
Raman 2,000
4,200
17,000
7,000
By Profit and Loss A/c
(Net Profits)29,400
Less: Interest
On Radha’s loan 1,200
28,200
28,200 28,200
When appropriation are more than available profits
In such case available profits are distributed in the ratio of appropriation.