Where is partner salary shown before distributing profit?

Correct answer: Debit in Profit and Loss Appropriation Account

Under partnership accounting, a salary paid or allowed to a partner is not an ordinary business expense like wages paid to an employee. It is an appropriation of the firm’s profit, provided that the partnership deed authorises it. Consequently, partner salary is debited to the Profit and Loss Appropriation Account, while the partner’s capital or current account is credited. Option A is therefore correct. The Trading Account is used to determine gross profit and does not record partner appropriations. A stock account records inventory movements, not salary allocation. A bank credit would represent a payment or reduction in bank balance, but it does not identify the proper profit-distribution account.