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If the final residual profit in the appropriation account was distributed between A and B in the wrong ratio 2:1 instead of the correct ratio 1:2. Total residual profit was ₹60000. What is the correction?

Answer and explanation

Correct answer: Debit A ₹20000 and credit B ₹20000

Wrong shares were A ₹40000 and B ₹20000 while correct shares are A ₹20000 and B ₹40000. So ₹20000 is transferred from A to B.

Related tags

PartnershipError CorrectionWrong RatioAdjustmentsPartnership Accounts Basic ConceptsAccountancyClass 12 Mcq

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