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The deed provides partner salary but the firm has a loss of (₹5000). What is the correct treatment of salary?

Answer and explanation

Correct answer: Salary will not be allowed if deed limits it to profit

Partner salary is generally an appropriation of profit. If there is no profit and no special instruction it is not allowed by increasing loss.

Related tags

PartnershipAdjustmentsPartner Salary LossPartnership Accounts Basic ConceptsAccountancyClass 12 Mcq

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