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As interest on capital is Rs 10000 but available profit is only Rs 7000 and B salary Rs 5000 is also payable. If no priority is given what is the safe exam approach?

Answer and explanation

Correct answer: Distribute appropriation items proportionately up to available profit

Appropriations cannot exceed available profit when no special order is given. Therefore proportionate distribution of available profit is safe.

Related tags

Insufficient ProfitAppropriationCapital AccountsPartnership Accounts Basic ConceptsAccountancyClass 12 Mcq

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