If one partner receives monthly salary and annual commission under the deed, where will both be recorded?

Correct answer: In profit and loss appropriation account

Direct answer: Option B, the profit and loss appropriation account. A partner’s salary and commission under the deed are generally appropriations of profit, not ordinary business operating expenses. The profit and loss account first determines the firm’s net profit. Then the appropriation account shows how that profit is distributed or applied: partner salary, commission, interest on capital and the remaining profit share may appear there. Option B is correct. Option A is wrong because the top of the cash book is not the proper classification for these profit appropriations; cash payment may affect cash, but the entitlement is recorded through the appropriation process. Option C is wrong because purchases account records goods bought for resale or production, not partner remuneration. Option D is wrong because capital reserve is a separate reserve concept and is not the normal place for partner salary or commission. If the firm has a loss, treatment can depend on the agreement, but the stated deed-based partner remuneration is ordinarily shown in appropriation. Exam cue: partner salary or commission usually means appropriation account.