Question

textit{Assertion (A)}: Partners' salary is debited to Profit and Loss Appropriation Account and not to Profit and Loss Account.
\textit{Reason (R)}: Partners' salary is an appropriation of profit, it is not a charge against profits.
Choose the correct option from the following:

• A. Both Assertion (A) and Reason (R) are correct and Reason (R) is the correct explanation of Assertion (A).
• B. Both Assertion (A) and Reason (R) are correct, but Reason (R) is \textit{not} the correct explanation of Assertion (A).
• C. Assertion (A) is correct, but Reason (R) is incorrect.
• D. Both Assertion (A) and Reason (R) are incorrect.

Hint:

Items like interest on capital, salary to partners, and profit sharing are appropriations, not expenses — hence appear in the Appropriation Account.

Answer 1

The Correct Option is A

Partners' salary is an appropriation of profits, not a charge like business expenses. Hence, it is debited to the Profit and Loss Appropriation Account.
Assertion is correct. The Reason also clearly explains why it is not charged to the Profit and Loss Account — it is an appropriation, not a charge. Hence, both Assertion and Reason are correct, and Reason is the correct explanation.
Final Answer: (A)