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Arrange the following in correct sequence in regard to Partnership firm:
A. Net Profit transferred to P & L Appropriation account
B. Preparation of Partner’s Capital account
C. Division of Profits among partners
D. Interest on Partners Capital accounts
E. Interest on partner’s Loan account
Choose the correct answer from the options given below:
  • a)
    D, C, B, E, A
  • b)
    E, D, C, B, A
  • c)
    E, A, D, C, B
  • d)
    E, D, C, A, B
Correct answer is option 'C'. Can you explain this answer?
Most Upvoted Answer
Arrange the following in correct sequence in regard to Partnership fir...
The correct sequence in regard to a Partnership firm is:

E. Interest on partner's Loan account:
  • Calculate the interest on the loan given by partners to the firm.
A. Net Profit transferred to P & L Appropriation account:
  • Transfer the net profit earned by the firm to the Profit and Loss Appropriation account.
D. Interest on Partners Capital accounts:
  • Calculate the interest on the capital invested by the partners in the firm.
C. Division of Profits among partners:
  • Distribute the remaining profits among the partners according to the agreed profit-sharing ratio.
B. Preparation of Partner's Capital account:
  • Prepare the partner's capital account by incorporating the interest on capital, share of profit, and other adjustments.

So, the correct answer is C: E, A, D, C, B.
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Community Answer
Arrange the following in correct sequence in regard to Partnership fir...
B. Capital accounts are adjusted
C. Interest on capital is allowed to partners
D. Reserves and surplus are distributed
E. Salary and commission are allowed to partners
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Arrange the following in correct sequence in regard to Partnership firm:A. Net Profit transferred to P & L Appropriation accountB. Preparation of Partner’s Capital accountC. Division of Profits among partnersD. Interest on Partners Capital accountsE. Interest on partner’s Loan accountChoose the correct answer from the options given below:a)D, C, B, E, Ab)E, D, C, B, Ac)E, A, D, C, Bd)E, D, C, A, BCorrect answer is option 'C'. Can you explain this answer?
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