Commerce Exam > Commerce Questions > Rent paid to a partner comes under:a)Profit a...
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Rent paid to a partner comes under:
- a)Profit and Loss Account
- b)Profit and Loss appropriation Account
- c)Partners capital Account
- d)Partners current Account
Correct answer is option 'A'. Can you explain this answer?
Verified Answer
Rent paid to a partner comes under:a)Profit and Loss Accountb)Profit a...
Rent paid to a partner is a charge against the profit. It means it will reduce the profit. That’s why it is shown in Profit and Loss Account instead of Profit and Loss Appropriation Account.
Most Upvoted Answer
Rent paid to a partner comes under:a)Profit and Loss Accountb)Profit a...
Rent paid to a partner is an expense incurred by the partnership firm. Therefore, it is recorded in the Profit and Loss Account of the firm.
Explanation:
Rent paid to a partner is considered as an expense for the partnership firm. The amount of rent paid reduces the profits of the firm, and hence, it is recorded in the Profit and Loss Account of the firm. The Profit and Loss Account is a nominal account that records all the expenses and incomes of the firm. The balance of the Profit and Loss Account is transferred to the Partner's Capital Account at the end of the accounting period.
The Profit and Loss appropriation Account is a nominal account that records the appropriation of profits among the partners. It records items such as interest on capital, salary to partners, and distribution of profits among partners. Rent paid to a partner is not recorded in this account.
Partner's Capital Account records the capital contributed by the partner, his share of profits or losses, and any drawings made by the partner. Rent paid to a partner is not recorded in this account.
Partner's Current Account records the transactions between the partner and the firm. It records items such as interest on drawings, interest on partner's loan, and any other transactions between the partner and the firm. Rent paid to a partner is not recorded in this account.
Therefore, rent paid to a partner comes under the Profit and Loss Account of the firm.
Explanation:
Rent paid to a partner is considered as an expense for the partnership firm. The amount of rent paid reduces the profits of the firm, and hence, it is recorded in the Profit and Loss Account of the firm. The Profit and Loss Account is a nominal account that records all the expenses and incomes of the firm. The balance of the Profit and Loss Account is transferred to the Partner's Capital Account at the end of the accounting period.
The Profit and Loss appropriation Account is a nominal account that records the appropriation of profits among the partners. It records items such as interest on capital, salary to partners, and distribution of profits among partners. Rent paid to a partner is not recorded in this account.
Partner's Capital Account records the capital contributed by the partner, his share of profits or losses, and any drawings made by the partner. Rent paid to a partner is not recorded in this account.
Partner's Current Account records the transactions between the partner and the firm. It records items such as interest on drawings, interest on partner's loan, and any other transactions between the partner and the firm. Rent paid to a partner is not recorded in this account.
Therefore, rent paid to a partner comes under the Profit and Loss Account of the firm.
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Rent paid to a partner comes under:a)Profit and Loss Accountb)Profit a...
Kyonki woh firm ka expense hai na ki partner ka isliye answer a hai
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