Partner A paid a firm expense of ₹16,000 from his personal bank account. The profit had already been determined, and this expense was not recorded in the books. What is the correct double effect?

Correct answer: Profit and Loss Adjustment A/c will be debited and A’s Capital/Current A/c will be credited

Because the expense was omitted after profit had already been determined, it is debited to the Profit and Loss Adjustment Account rather than the regular Profit and Loss Account. This reduces profit. Since Partner A paid from personal funds, the firm owes A, so A’s Capital or Current Account is credited. Options B and D incorrectly affect the firm’s Bank Account, although the payment was made from A’s personal bank account. Exam tip: An expense paid personally by a partner credits that partner’s account.